Isle of Man Today, the online presence of a trio of newspapers on the island between the Great Britain and Ireland, is reporting that PokerStars has informed its staff that layoffs are coming. PokerStars has two offices on the Isle of Man, including its headquarters, where it employs about 450 people.
At least they got advance warning
It does not sound like there have been any job cuts yet, but about 80 people have reportedly been told that they could be on the chopping block. Ten layoffs are expected this year, with the rest spread out over 18 to 24 months.
PokerStars did not confirm numbers, but did seem to confirm to Isle of Man Today that job reductions are on the way. A spokesperson told the media outlet:
As we’ve previously noted, our international segment (PokerStars) has faced many headwinds over the last year, including disruptions in our key markets.
As a result, we are pursuing operational initiatives, including cost-optimization initiatives, as we’ve done in the past, to reassess our fixed cost base and realign our costs with our global growth strategy.
We believe the proposed reductions in head count on the Isle of Man are a component of our overall plans to position us to deliver our mid-term growth targets and long-term sustainable growth.
The spokesperson also stressed that the offices as a whole on the island are not at risk, saying, “Apart from the personal impact on affected individuals, today’s news will have little foreseeable impact on our overall operations in the Isle of Man, which has always been a critical operational hub for the company and will remain so.”
The Department for Enterprise, the state’s economic development agency, was told by PokerStars of the upcoming layoffs. The Department also seems to know the numbers, but is not divulging that information.
“The department has worked closely with the Stars Group in the past through what has been a number of years of significant growth on the island and will continue to support them through their business decisions in the long term, as well as looking to assist any staff who are ultimately affected to support them in finding alternative roles,” a spokesperson for the Department said.
PokerStars falling back to the pack
Despite being the most visible name in online poker, PokerStars is not the dominant behemoth it once was. According to PokerScout, PokerStars.com’s seven-day average cash game traffic is 5,800 players. That number was over 20,000 not that many years ago. Granted, PokerStars is now split into different regional and ring-fenced sites, so the PokerStars.com is artificially lower than it might otherwise be, but even combined, PokerStars has seen double-digit traffic decline every year for a decade.
The Stars Group, PokerStars’ parent company, recently reported disappointing financials for the second quarter. Earnings were down 20 percent from the same quarter last year and the company revised guidance downward for the rest of the year. Revenue was up, but that was really because the company bought Sky Betting and Gaming.
The Stars Group’s stock price has tumbled, as well. It closed today at $15.01, a far cry from its 52-week high of $25.88 and not far from its 52-week low of $12.59.