Scientific Games plans to save more than $100m in Q2 through a number of moves it is making in response to the ongoing coronavirus pandemic. The company is acting in an effort to protect the jobs of its workers and to help its operations to continue into the future.
lowered the pay and reduced the working hours of its employees
As part of the cost-cutting measures, Scientific Games has lowered the pay and reduced the working hours of its employees. Those holding support roles have been furloughed. The executive leadership has voluntarily halved its salaries while company CEO Barry Cottle has forgone all remuneration.
Total savings calculated
In total, the measures to reduce workforce costs will result in approximately $50m worth of savings. Scientific Games will also spend $50m less than was initially budgeted for capital expenditure in the second quarter.
approximately $50m worth of savings
This will mean that for the entire year, the company’s capital expenditure will be closer to the $210m-$240m range than the initial pre-pandemic estimates of $300m to $330m.
Scientific Games also plans to cut other forms of operating expenses to generate further savings. It has taken out about $480m from its revolving credit lines to help it navigate through the current situation. As the world gets back to normal, it will use cash reserves and the borrowed funds to avail of potential opportunities that could help strengthen its business into the future.
The core business
Scientific Games is a publicly traded company headquartered in Las Vegas, Nevada. It provides a wide range of gambling products to operators around the world, including mechanical slot machines, table games, iLottery and igaming products, instant lotteries, lottery systems, and sports betting.
With most casinos in the United States and Europe shut down, as well as most sporting events postponed, companies in the gambling industry have been taking similar cost-cutting actions. Many have issued profit warnings and cut dividends in recent weeks.