Dec 5, 2008 2:45 pm US/Eastern
Sotheby's To Issue Layoffs, Salary Reductions
NEW YORK (AP) ―
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Sotheby's Inc. said Friday it 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.
Sotheby's Inc. said Friday it 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 the plan would affect its North American operations, which employs 605 people.
Its rival, Christie's, said Friday it also was reviewing its strategic plan due to the global financial crisis and its sales results for the fall.
"We are considering reorganization which would lead to layoffs," said spokesman Toby Usnik. 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 $5 million charge against earning in the fourth quarter related to employee restructuring. Beginning in 2009, the restructuring plan "will reduce annual salaries and related costs by approximately $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 in early January, he said.
The auction houses' important sales of contemporary, modern and impressionist art last month were the first strong indicator 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."
Sotheby's shares are down 78 percent this year, with shares falling 2 cents to $8.70 in midday trading in New York on Friday. Its 52-week range has been $7.24 to $39.67.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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