Shares of MGM Resorts (NYSE:MGM) were falling over 6% in afternoon trading Monday after Las Vegas casinos notified their staff that if they weren't recalled from furlough by August 31, they would subsequently be fired.
Major employers are required under the federal Worker Adjustment and Retraining Notification Act (WARN Act) to notify their workers when there are expected to be mass firings. MGM Resorts, Wynn Resorts, Tropicana, and other casino operators sent out such notifications.
MGM told its employees that it had originally hoped the casino closures would be brief and full operations could be restored. But the pandemic has progressed, and based on currently available data, it doesn't look like "it will be safe to restart shows prior to August 31, 2020."
That means the "large majority" of employees in the entertainment and sports division will be fired on that date. Health benefits will also be terminated on that date, though employees who are let go will be able to still apply for emergency grants from the casino through Nov. 29, 2020.
Shares of Las Vegas Sands, MGM, and Wynn were all down today, though MGM was hardest hit.