MGM Could Replace Many Employees with Robots

MGM Grand in Las Vegas

30-second summary

  • MGM is thinking about replacing workers with robot technology in its Las Vegas Strip properties
  • Its 2020 plan calls for reducing the workforce by about 2,100 people to save $300m in the coming years
  • Unions and workers will likely react strongly to such a move
  • A McKinsey and Company report estimates that by 2030, 800 million jobs will get robot replacements

Robots taking over employment

Many corporations are embracing the latest robotic technology. Companies can make many processes more cost- and time-efficient by using robots and other types of technology.

In a lot of industries, robots can now be more efficient and productive than people. This sparks the debate about protecting these jobs for humans or to allow robots to make these processes more efficient.

MGM, one of the major global casino companies, is considering replacing some workers with robots, which will cause some concern for their employees and those in the industry as a whole.

The company has been looking into doing this at their MGM properties on the Las Vegas Strip as a way of cutting costs considerably. It is likely that the casino worker unions in Nevada will soon be up in arms about this issue.

Among those who could be replaced are cashiers and bartenders. Automatic technology that can make drinks would replace the bartenders and monetary transactions could be done through standard payment technology.

There would also be mobile payment processors going around the floor with the wait staff, eliminating the need for cashiers. There is no indication as to how many such jobs would be replaced at the MGM properties.

Reaction to this potential move

The unions and workers will not be happy with this news. Jobs will be lost and it may also violate the labor agreement that MGM struck with the unions last summer.

The Las Vegas Culinary Union (LVCU), which represents bartenders, kitchen staff, and wait staff, reached a five-year deal in June 2018 with the MGM.

The agreement guarantees that MGM will not implement any technology that would have a negative impact on employment. However, the news that the MGM is considering replacing some workers with robots could mean that the company is not willing to fulfill this agreement.

For some time, the MGM has been looking at ways of trimming its considerable costs. CEO Jim Murren presented a new “MGM 2020” plan at the beginning of the year.

This plan calls for cutting the number of workers by about 2,100 people in 2010. He believes that such a move will see them save about $200m (£153m) in earnings before interest, tax, depreciation, and amortization (EBITDA) over the next couple of years and $100m (£76m) in following years.

The unions will be watching all developments closely, especially since they were made aware of this MGM 2020 plan.

A growing trend

With robot technology and artificial technology constantly becoming more and more advanced, more jobs will be lost to robots and automation.

A McKinsey and Company report estimates that robots could take over as many as 800 million jobs globally by 2030. This is especially the case in advanced economies, such as in the United States.

As a result, millions of people will have to learn new skill sets in order to adapt and find employment.

Not all industries will face the same struggles. Jobs involving social interaction, applying expertise, or managing people naturally will not be replaceable by robot technology. However, a lot of people in back-office work, accounting, and paralegal jobs will easily be replaceable thanks to automation.