Online gambling operator giants Stars Group has lined up a programed formula to reduce the number of its employees. The firm argues that it’s taking this measure because some of its staff have no value due to regulatory delays in some countries.
The plans to reduce the number of employees will only affect the headquarters, which is based in the Isle of Man. The Stars Group (TSG) is the parent company for both PokerStars and SkyBet gambling firms. TSG made the infamous announcement on Wednesday citing that, “the proposed reductions are essential for the firm to achieve mid-term growth goals and long-term sustainable growth.”
It’s estimated that the total number of staff on the island alone is around 400 individual. The number of workers in IOM is believed to be 20% of the overall team at TSG. The latest TSG financial reports indicated low operations in some of the critical international market. Norway, Switzerland, and Russia are some of the key international markets often subjected to regulatory “disruptions,” thus lowering the work input.
The Wednesday announcement also confirmed that TSG is “pursuing operational initiatives, including cost optimization.” TSG further made public its initiative to “reevaluate its fixed cost base and realign their expenditure according to the global growth.”
TSG expressed some sympathy to workers who will be affected by the move, but insists that, “the reduction will have little foreseeable impact on the overall operations.” The firm also maintained that, “IOM has always been critical operation hub for the company and will remain so.”
It’s alleged that 80 workers have been served with the notice that they risk losing their jobs in the near future. Speculations are also rife that ten employees at IOM are set to commence the layoff plan before the year concludes. The rest of the employees considered to be redundant to TSG will exit the company in the next 18-24 months.
TSG has now been at the Onchan Head located in Douglas Bay Complex for 14 years, and the workers are now beyond 400. One of the most significant growth that TSG has witnessed was back in 2012 when the firm bought its island’s headquarter offices.
The announced plans come at the backdrop of the recent financial drop in the past year following headwinds emanating from legislative issues. According to the latest financial report, TSG poker revenue dropped by 11.5% in the second quarter of the year. Further, there’s a 12.4% drop six months preceding June 30, 2019.
It’s now evident that sports betting has overtaken poker activities in remitting the highest chunk of revenue at TSG. Sports betting income accounted for 36% of TSG’s consolidated revenues, while the poker sector could only contribute 30% of the group’s revenue. The diminishing revenue in the poker department has been sharp, considering that only in the second quarter of 2018, poker accounted for 53% of the firm’s total revenue. Slovakia is another country that has brought some restrictions in the gambling industry in the past year, causing headwinds to intensify further.
This is what TSG had to say about the progress of its products in the wake of the financial woes adverse foreign exchange fluctuations and continued disruptions and regulatory headwinds in certain markets. This has led to reduced deposits by customers as a result of local restrictions on some methods of payment processing and on certain methods of downloading The Stars Group’s poker applications, which was partially offset by continued organic growth in most other markets.”