MGM Springfield on Friday told 1,000 laid-off employees that they were unlikely to reclaim their jobs anytime soon, citing lagging business following a monthslong shutdown because of the pandemic.
The casino said it told the employees — who accounted for half of its staff before the COVID-19 pandemic — that they would be “separated” from the company Aug. 31, but that affected employees’ benefits would be paid through September.
MGM said 800 people now work at the casino, which was closed from March into July. While it has resumed some gambling activities, the hotel remains closed. State rules to prevent the spread of the coronavirus have limited the availability of table games, reduced restaurant capacity, and barred large gatherings such as concerts and conferences that are important to casino’s business.
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“Unfortunately, the pandemic continues to impact many businesses, including our own,” MGM Springfield president Chris Kelley said in a letter to workers. “Due to the mandated capacity restrictions and business demand, many of our amenities and venues remain closed for the time being. With these positions currently unavailable, it has not been possible to bring back all of our team members.”
The move underscores just how badly the pandemic has hurt the state’s young casino industry, which was approved largely as a way to deliver economic development benefits to communities that sorely needed them.
Even before the crisis, the casinos had struggled to find their footing in a competitive regional market.
MGM Springfield had been expected to create about 3,000 permanent jobs, and even if it brought back all of its separated employees, it would still be well below that figure. Encore Boston Harbor in Everett — which has opted to reopen its hotel — has 2,700 people on its payroll, and another 1,300 on furlough. Encore had been projected to employ 5,000 people on a permanent basis.
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And Plainridge Park, the slots-only casino in Plainville, declined to say how many people had returned to work after the shutdown forced it to furlough all but a skeleton crew for months. It had 485 people working there at the end of last year.
Springfield Mayor Domenic J. Sarno said in an interview that local and corporate leadership at MGM resorts has assured him that the casino will be able to make a strong return as a contributor to the local economy once the restrictions related to COVID-19 subside.
He said he was encouraged that MGM Springfield followed through during the pandemic with a plan to contribute $16 million to a project that will create 74 market-rate and workforce housing units, part of the redevelopment of a historic portion of downtown near the casino. Work kicked off this week.
“MGM is committed to bringing these employees back, ASAP, so that’s our goal,” Sarno said. He added, “We’ve had a good relationship, and I take them at their word.”
The employees affected by the MGM decision have largely been laid off or furloughed without pay since April. Many had been hoping to be called back before the end of August — a date the company had previously said would be a legal deadline for formal separation. Across MGM Resorts properties, 18,000 employees were affected.
“The heart of this company is our employees and the world-class service you provide,” MGM Resorts chief executive Bill Hornbuckle said in a separate letter to staff. “Please know that your leadership team is working around the clock to find ways to grow our business and welcome back more of our colleagues.”
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The company characterized the decision as an administrative one. It said affected workers would retain access to internal job boards, and that people could still be brought back as business improves. Workers won’t have to reapply if they are reclaiming a position with the same duties they had before.
“While I understand this is difficult to hear, I want you to know that as we progress through our phased reopening, team members separated today will remain on our recall list, and we have established a system to welcome them back based on business needs, position, and seniority,” Kelley said.
One former MGM employee, however, said the fact that workers were getting separation notices gives him a feeling of finality after months with his career in limbo. The man, who asked not to be identified because he still wants to be rehired, said the temporary continuation of health benefits relieves some pressure as September looms. But he’s anxious about what comes after that.
“I started that job with a lot of hope — optimism for the future — and right now I’m mourning the death of a dream I had. I’m mourning the death of a relationship,” he said.
Andy Rosen can be reached at andrew.rosen@globe.com.