By now, everyone knows that Eldorado Resorts has made a deal to take over Caesars. However, before this was decided, one big issue was Eldorado’s wish to cut Caesars’ costs by at least $500 Million. Despite the fact that this deal is costing them a huge $17.3 billion, to make it feasible, they need to make sure that the overall running costs of the business are limited.
So, to prepare for the upcoming deal. Caesars has already started to cut some of its costs when it comes to headcount, among other things. They are starting this by trimming down a number of roles in the company.
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Management Leading the Way
In essence, some of the management roles will be the first to face the chop. The first round of cuts will save around $40 Million. However, they want to increase this figure to between $75 Million to $100 Million before the deal goes through.
Apparently, investors from both parties have agreed to all the terms of this deal. So, it should go through in the first half of 2020. Having said that, there are hopes that they might finalize the agreement in the first three months of the year. Yet, despite the acquisition, they will keep the name Caesars. Because Caesars is, after all, a strong brand that everyone knows and that many trusts as well.
Taking the Reins
Dropping some of the management jobs makes sense. The Eldorado Resort CEO Tom Reeg wants to lead from the front. He will be looking after the day to day business.
Even before the deal went through, Reeg looked at the business to see how he could cut costs where needed, so they have already made plans to hit targets. Despite the deal costing $17.3 billion, Wall Street has belief in the company and the success of the deal. They have already established a good reputation for small acquisitions and being able to cut costs as and when needed.
Other ways of making the figures add up are by halting Caesar’s international expansion and a spin-off of Caesars Online Casino and Sportsbook as well. And this may mean that the company will need to recruits more people. So it’s not all about job cut. But also re-allocation of existing resources.