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KUALA LUMPUR (May 21): Genting Malaysia Bhd is believed to have announced to its employees that the casino group needs to undertake an unprecedented sizable retrenchment exercise, according to sources.
"They are retrenching about 10% to 20% of their staff force that stands at about 20,000," said a source.
At the time of writing, Genting Malaysia had yet to respond to query by theedgemarkets.com on the matter.
The group's latest annual report stated that Genting Malaysia has a total workforce of 20,000 worldwide.
The casino operator, which has weathered several severe economic down cycles in the past five decades, did not have a lucky escape from the global outbreak of Covid-19 that has resulted in the shutdown of all its casinos.
The closure has lasted for more than two months. This is expected to take a heavy toll on Genting Malaysia.
"Having a major cost-cutting exercise at the Genting group is inevitable today given all that has happened. Salaries make up a large chunk of its costs," said a gaming analyst.
The group is expected to release its March quarterly results by this week.
Genting Malaysia's stock closed unchanged today at RM2.36 that is at a price-earnings ratio of 9.59 times. This brings its market capitalisation at RM14.01 billion. Year-to-date, the counter has shed 25.8% from RM3.18.
Its parent company Genting Bhd closed one sen higher at RM4.08, valuing the counter at RM15.82 billion. Its share price has had a bigger fall of about 31% from RM5.91.
Genting Malaysia loses RM417.9m in 1QFY20
Covid-19 closures push Genting into the red with RM133m quarterly loss