Bally’s Interactive headcount will be a little leaner in 2023 as the company plans to cut up to 15% of its workforce.
The company announced the news in an SEC filing shortly after the market closed Wednesday. The filing included the letter sent to employees by CEO Lee Fenton.
Bally’s, the publicly traded casino operator that spent $2.8 billion to buy Gamesys to upgrade its online gaming offerings, expects severance costs to be between $10 million and $15 million that will hit in the first quarter.
What Bally’s CEO said to employees
Fenton started the letter by saying Bally’s has a “resilient business model, which puts us in a great place to do well in the toughest conditions.” The positive sentiments mostly ended there, though:
“However, we always need to be acutely aware of the macro-economic conditions and adjust accordingly to come through what is a challenging environment in the best possible shape. Companies who take tough but decisive steps to effectively manage costs will be stronger and fitter for the future. I am committed to ensuring that Bally’s is one of those that is best placed to flourish in the long term.
“With this in mind, we’ve made the difficult decision to reduce our Interactive employees and contractor workforce by up to 15%, over the coming weeks.”
North America profits taking longer than expected?
Bally’s mature businesses continue to grow but face uncertainties, Fenton said.
The company is still investing in North America and will see returns, but “we can now see that this will take some time to come to fruition, so we need to manage our cost base appropriately,” he said.
That is not surprising to hear given how little market share Bally’s has taken in the US. The company bet big on regional sports networks as a way to build a database, but so far those returns look slim.
BallyBet is live in six states. Bally’s share of sports betting handle in the most recent reports for Arizona, Indiana, Iowa, New York and Virginia is below 1%.
Online boost not enough
Fenton mentioned Bally’s Interactive did not achieve everything it wanted to in 2022 despite “so much effort.”
The company continued to hire at “full pelt” after the COVID-19 pandemic boosted online business. That led to over-hiring in some areas, for which Fenton says he takes full responsibility.
The business intends to offer more than is required for severance packages but that will ultimately depend on what local governments require in every country.
Bally’s share price closed at $19.68 following Wednesday trading.