Tabcorp Holdings, one of Australia’s leading gambling and betting companies, has laid off approximately 200 employees, representing 10% of its workforce, to streamline its business and cut costs. The cuts, spanning all divisions except the horse-racing broadcasting arm Sky Racing, come amidst increasing competition and financial pressures.
The Australian Financial Review first reported the layoffs, citing a company spokesperson who stated: “Tabcorp is creating a fitter organization and a new cadence to move more quickly in a changing market. Tabcorp acknowledges the significant contribution and service of staff.”
The cost-cutting measures follow Chief Executive Gillon McLachlan’s announcement at Tabcorp’s annual meeting in October, where he emphasized the need to reduce operating expenses in the current financial year.
Alongside staff reductions, Tabcorp has scaled back its reliance on external consultants, including Ernst & Young and Boston Consulting Group, which had previously been integral to its cost-saving initiatives.
These changes aim to position Tabcorp more competitively against digital betting companies such as Entain, owner of Ladbrokes, and Flutter, which operates Sportsbet in Australia. Despite these efforts, the company faces significant challenges in meeting its targets.
In August, Tabcorp shares plummeted over 15% after McLachlan revealed that the company was unlikely to achieve its cost-reduction goals or capture 30% of the digital wagering market by the next year. Additionally, Tabcorp revised its operating cost projections, now expected to exceed the $660 million target for the fiscal year.
The company’s recent moves coincide with broader restructuring in the Australian racing and wagering sector. The Victoria Racing Club (VRC), which operates the Melbourne Cup Carnival, recently announced its own workforce reduction of 15% under new CEO Kylie Rogers, citing rising costs and stagnant revenues.
Tabcorp’s strategic evolution has also involved high-profile investments, such as its six-year Melbourne Cup broadcasting deal, reportedly worth $80 million, and securing exclusive wagering rights for Victorian pubs and clubs. However, these initiatives have not shielded the company from financial strain.
Tabcorp shares closed at A$0.54 ($0.35) on Wednesday, resulting in a 1.8% decline for the day.
Original article: https://www.yogonet.com/international/news/2024/12/04/87465-tabcorp-cuts-200-jobs-as-costcutting-measures-target-growing-competition
