Star Entertainment announces new restructuring plan
Star Entertainment has recently announced a restructuring plan involving layoffs and canceled investor incentives amid a “deteriorating” operating climate.
The operator mentioned the weakening of consumer spending, along with the sizable regulatory restrictions it has faced in recent months in the form of numerous major fines as the main driving factor for this latest move.
The company is going to be making approximately 500 full-time equivalent redundancies across the entirety of its workforce, except for its risk management department. The Star is also going to be canceling all of its investor incentives and freezing the salaries of all employees who have not signed enterprise bargaining agreements (EBAs).
Combined with the business enhancement initiatives the company announced in its financial report for the first half of the 2023 financial year, Star Entertainment estimates to reduce operating costs by over 100 million Australian dollars.
As mentioned earlier, the majority of The Star’s troubles are originating from the immense penalties the firm has been hit with over the past year. The operator has received two 100 million Australian dollar fines from the states of Queensland and New South Wales in addition to an 80 million Australian dollar fine from the state of Victoria and an upcoming penalty of yet undecided magnitude, which will follow the company’s recent guilty plea in a Queensland court.
Additionally, the firm has had numerous operating restrictions imposed on it and has experienced several higher-management resignations and changes, such as the recent departure of Star Sydney CEO Scott Wharton, as well.
However, the corporation stated in its announcement that it is actively working with the governments of Queensland and New South Wales to remedy its failures.
Lastly, Star Entertainment also posted a trading update along with the restructuring plan, which highlighted a rapid decline in the firm’s previous strong performance. The company stated that its earnings have reached “unprecedented” lows and that it estimates an EBITDA of 280 million to 310 million Australian dollars at the end of the financial year if conditions remain unchanged.
In contrast, the firm’s FY2023 EBITDA expectations were in the range of 330 million to 360 million Australian dollars at the end of the financial year’s first half in early January.