Layoffs innitiated by finalization of Harveys sale to Harrah’s
Twenty-three people – most in management – were laid off when Harrah’s Entertainment closed on its $675 million acquisition in cash and liabilities with Harveys’ parent company Colony Capital, after receiving all its regulatory approvals last week.
For two of the top managers in the almost two dozen people laid off, the reality of staying home today was no laughing matter.
“It’s going to be hard and painful for a lot of people, and we have to help them through it, but at the end of the day markets march through it. It’s the logical, inevitable conclusion. Everybody’s got to move on,” said Jim Rafferty, Harveys former senior vice president of corporate marketing who was laid off. “I got to work with some great guys in the business.”
The father of six plans to make up for lost time and seek out other opportunities – perhaps over the hill in Carson City.
Rafferty, who worked for the casino for 13 years, wore his service pin as a gesture of solidarity for those who built the Harveys name.
“This is Harrah’s day. It’s business. That’s just the way of the world. Modern business is the equivalent to war. I understand that Harrah’s has to be tough on expenses to meet goals for shareholders,” he said.
Harveys’ corporate-level division will fall under the Harrah’s Entertainment Las Vegas umbrella, resulting in 11 people out of 57 without jobs effective today. Affected departments include: corporate marketing, human resources, risk management and finance. Twenty-one people will serve in a transitional role, and their jobs will be evaluated in a few months. Some may stay on or take on new jobs outside the area at other properties.
Among the dozen who were laid off outside the Harveys corporate arena, former General Manager Willie Stephens may find himself seeking employment away from Lake Tahoe too, he said Tuesday as he packed to leave his office.
“It’s a matter of when I want to move and where I want to live. I have several things in the works out of the area,” he said.
Eleven non-corporate managers out of 64 will stay on a transitional basis.
Stephens, who’s lived on the South Shore for 20 years and has been Harveys G.M. for two, plans to embark on a road trip to make that determination.
He’ll miss Lake Tahoe, he said, his voice cracking.
“There are a lot of great people here. It’s a sad day at Harveys, but Harrah’s is a quality company, and I’m sure they’re going to continue in the Harveys vein,” he said.
Harrah’s Entertainment plans to keep the Harveys name for at least a year. It may be a permanent fixture, too, western division president Carlos Tolosa declared.
Tolosa pledged to South Lake Tahoe Harrah’s commitment to the community and the properties, the first adjoining structures connected by a tunnel. Harrah’s has side-by-side properties in Atlantic City and St. Louis.
“We’re clearly going to spend some money to make the connection more accessible,” Tolosa said.
First, the casino giant needs to save some. Tolosa said the company predicts a savings in expenses reduction and incremental revenues that amounts to $12.5 million over the next 18 months.
Harrah’s Entertainment now owns Harveys Casino on the South Shore; Harveys Casino Hotel and Bluffs Casino in Council Bluffs, Iowa; and Harveys Wagon Wheel Hotel/Casino in Central City, Colo. The buyout brings the Vegas-based casino company to 25 properties in 12 states.
Harrah’s will add Harveys properties to its Total Rewards program that rewards customer loyalty, bringing the database to more than 23 million players.
Harrah’s announced its intention in April to buy its primary gambling rival in South Lake Tahoe following a call from Colony Investors to Harrah’s Chief Executive Officer Phil Satre. Colony bought Harveys for $420 million in 1998.