Sotheby’s Inc has approved a restructuring plan that will lead to salary reductions and layoffs because of poorer than expected earnings.
It was unclear how many people would lose their jobs. The art and antiques auction house said on Friday that the plan would affect its North American operations, which employs 605 people.
Its rival, Christie’s, said on Friday that it, too, was reviewing its strategic plan because of the global financial crisis and its sales results for the fall.
“We are considering reorganization which would lead to layoffs,” spokesman Toby Usnik said.
The company has 2,100 full-time employees worldwide.
In a Thursday filing with the Securities and Exchange Commission, Sotheby’s said that it would take a US$5 million charge against earning in the fourth quarter related to employee restructuring.
Starting next year, the restructuring plan “will reduce annual salaries and related costs by approximately US$7 million, when compared to 2008 levels.”
Unlike Sotheby’s, Christie’s is a privately held company and as such is not required to disclose its financials.
However, Usnik said: “We are on solid financial footing but like all businesses, we’re reviewing our business strategies in light of the current global economic environment.”
More details will be announced early next year, he said.
The auction houses’ important sales of contemporary, modern and impressionist art last month were the first strong indicators of a slowdown in the fine art market. Many works went unsold and many others sold at or below their estimates.
Afterward, Sotheby’s chief executive Bill Ruprecht conceded that the global financial meltdown had an impact on its sales, but predicted that going forward the company would “be meaningfully profitable at significantly lower sales levels.”
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