GTECH lays off 30 in R.I. as profit drops

GTECH LAID OFF 30 employees from its Rhode Island operations last month despite growth in the company’s sales through the first nine months of the year.
Posted 12/1/09

PROVIDENCE – Lottery giant GTECH Corp. laid off about 30 employees in Rhode Island two weeks ago as part of a larger round of worldwide cuts by its parent company, a spokesman said Tuesday.

The job cuts took place on Nov. 17 at a number of the company’s facilities in the state, said Robert Vincent, senior vice president for corporate affairs at GTECH, a subsidiary of the Italian company Lottomatica SpA. The parent company eliminated about 80 positions across its divisions, he said.

“Like most good companies, we address our workloads as projects come or as customers go away,” Vincent told Providence Business News. “We tend to do a continual assessment of our resource levels.” No further cuts are expected this year, he added.

GTECH employs about 1,120 people locally. In addition to its downtown Providence headquarters, the company has large facilities in West Greenwich and Coventry, as well as smaller offices elsewhere in the state.

Vincent said this was the first time GTECH had laid off local workers since 2007, a year after it was acquired by Lottomatica.

The cost-cutting follows Lottomatica’s announcement last month that GTECH’s earnings this year have lagged the company’s as a whole.

GTECH’s operating income dropped 13.6 percent to 95 million euros ($130.15 million) in the first nine months of 2009, down from 110 million euros ($168.3 million) in the same period last year. GTECH’s revenue rose 14 percent to 641 million euros ($878.17 million).

By contrast, Lottomatica’s total operating income through Sept. 30 rose 2.7 percent to 346 million euros ($474.02 million), and revenue increased 16 percent to 1.59 billion euros ($2.18 billion).

Vincent said the company was pleased to see its same-store revenue improve year over year during the third quarter. “We’re really encouraged by same-store sales growth, which is really our key metric,” he said.

He also noted that over the past year GTECH has had nine clients extend their contracts beyond their original terms without bothering to solicit new bids from its competitors.

“It’s a very good indication of customer satisfaction, and it’s a real chance for us to build on the power of our incumbency,” he said. “Commercially, we’ve had a tremendous amount of success.”

Lottomatica said Nov. 12 it would sell senior unsecured bonds worth as much as 750 million euros ($1.13 billion) in order to refinance debt.

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