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Shakeups at Leading Slot Companies

Shakeups at Leading Slot Companies

Two of the world’s top slot companies experienced changes at the top last month as the slot market gets more competitive.

Leading slot manufacturer International Game Technology announced that Chief Operating Officer Steve Morro has resigned, with president and CEO TJ Matthews taking on additional duties.

Morro will remain with the company as a non-executive employee, according to a filing with the Securities and Exchange Commission.

Morro’s resignation comes as a surprise, Goldman Sachs analyst Steven Kent said in a client note, as he was favorably received by investors.

Morro, who was named COO in June 2007, had been president of IGT’s gaming division since 2005. The manufacturer has been reshuffling its management structure to achieve more efficiency in the current economic slump.

Morro’s departure also comes as the company continues an executive search for a new chief financial officer. Maureen Mullarkey resigned as CFO in June 2007, and Daniel Siciliano has served as interim principal financial officer since then.

Analysts stressed that while Morro is a well-respected executive, the resignation could be a positive for the company if it is part of a restructuring to bring costs down.

In that spirit, Matthews announced that the company would reduce its 5,400-employee workforce through a combination of early-retirement buyouts and layoffs.

IGT will offer buyouts to roughly 500 employees who are age 55 or older, Sales VP Ed Rogich told the Associated Press. Matthews is expected to make a decision on job eliminations and layoffs in January.

Matthews said in an e-mail to employees that the number of layoffs will depend on how many accept voluntary separation.

“As we continue efforts to reduce expenses and restructure the company to maximize efficiencies in light of a strained economic environment, it has become evident that we must conduct an involuntary reduction in our work force in addition to our other efforts,” Matthews said in the message.

“My hope is that through these efforts, we can stabilize our spending to be aligned with our revenue forecasts and be in a position to weather the near-term uncertainty that is prevalent in our industry and our economy in general.”

IGT currently employs 3,000 at its Reno headquarters, and 1,000 in a new facility in Las Vegas. The remainder of the manufacturer’s work force is spread across the world.

Meanwhile, Australia’s Aristocrat Leisure Ltd. has replaced Tim Parrott as president of Aristocrat Technologies, the slot manufacturer’s U.S.-based subsidiary. Parrott, who took the helm at Aristocrat only two years ago when Gavin Isaacs left to take over as COO of Bally Technologies, has overseen a period of declining U.S. sales and plunging stock prices for Aristocrat.

The new president of Aristocrat Technologies

is Nick Khin, who has been head of the company’s operations in Europe, the Middle East and
Africa for the past two years. Under Khin, that region has reported record revenue (up more than 50 percent) and profitability (up 140 percent) over the past two years, with the company significantly increasing its overall market share and presence in the region.

Khin has also had global executive responsibility for development and commercialization of the company’s ACE Class III and VLT TruServ server-based gaming initiative through its Stockholm-based subsidiary, ACE Interactive. In addition, he has played a key supervisory role over Elektroncek BV, the company’s 50 percent-owned multi-terminal business, which sells the Interblock brand of electronic table games.

“I am confident that Khin’s leadership style coupled with his intimate understanding of global gaming markets and customers will establish Aristocrat as the pre-eminent supplier of gaming solutions in the Americas region,” said Aristocrat CEO Paul Oneile in a statement.

Oneile himself announced earlier this year that he is stepping down as head of the Australian slot-maker, effective at the end of the year.

Parrott had been in casino operations prior to joining Aristocrat, holding executive positions with Primadonna Resorts and a position on the board of Pinnacle Entertainment.