MGM announces plan to reduce labor costs to grow company
MGM Resorts International has announced a plan to further reduce costs, improve efficiencies and position the Company for growth.
The Company expects to deliver annualized Adjusted EBITDA uplift of $300 million in aggregate, consisting of $200 millionby the end of 2020 and an additional $100 million by the end of 2021.
The program, known as ‘MGM 2020’, will be a company-wide, business-optimization initiative aimed to leverage a more centralized organization to maximize profitability and, through key investments in technology, lay the groundwork for the Company’s digital transformation to drive revenue growth. The plan expands upon themes that were outlined at the Company’s 2018 Investor Day and also builds on MGM’s highly successful Profit Growth Plan that was implemented in 2015.
“Today, we are taking the next step in our evolution as an organization. We are building on the strong foundation that we have solidified over the past few years, to deepen our efficiencies and achieve sustained growth and margin enhancement,” said Jim Murren, Chairman and CEO of MGM Resorts International. “MGM 2020 is intended to further transform the way we operate and leverage the most effective operational architecture for our company.”
Mr. Murren continued, “When we launched our Profit Growth Plan a few years ago, we transformed our culture to embrace a ‘One Company’ approach to operations, create best practices and efficiencies, and drive significant Adjusted EBITDA growth and margin expansion. Importantly, during this time, we established key centralized strategic functions and developed crucial operational expertise to enable best practices and efficiencies. These cornerstone strengths allowed us to exceed our initial expectations on our Profit Growth Plan, as we currently operate many of the most profitable destinations in Las Vegas and across our regional markets.”