Even before Eldorado Resorts Inc. floated the idea of acquiring Caesars, the company sought to save $500 million in cost cut initiative. To remain in line with its acquirer, Caesar is also embarking on the cost-cutting process. The company has started trimming some management jobs on its Harrah’s and Horseshoe brands since last October.
According to Caesar’s Securities and Exchange Commission (SEC), the company started the initiative on 10th October 2019, an effort that will help it achieve operational efficiency. The company also reported having started a Voluntary Severance Program (VSP).
The ongoing imitative is expected to save Caesars $40 million. However, the company is targeting a cost reduction of $75 million to $100 million before its merges with Eldorado. Shareholders from both firms have already approved the deal, it’s expected to be finalized in the first half of 2020, but the analyst believes it can be done by the first quarter of 2020.
The cost reduction initiative is making sense before the merger. After the deal is finalized, Eldorado CEO Tom Reeg will oversee the daily running of the two companies, but Caesar will retain its name.
According to Casino.org, Reeg and his management team are said to have spent time analyzing how Caesars’ $500 million cost-saving can be achieved. It is believed that Reeg and his team finally agreed on cutting jobs in management and top executives positions.
Although Eldorado’s acquisition of Caesar has sparked concern among analysts, the company has remained firm on Wall Street purposely due to Reeg and his team’s ability to make acquisitions and also carry out cost-saving deals.
What’s Next For Caesars?
According to Caesars SEC, the Voluntary Severance Program (VSP) was completed on 28th October for eligible volunteers. The company plans to spend $20 million on compensation towards the program. Caesars hasn’t revealed the regions which will be affected by the program. However, Eldorado is expected to continue shedding more assets, including Caesars property on the Las Vegas Strip. The company wants to reduce expenses and generate revenue after the deal is finalized.