Sotheby’s laid off more than 100 staff members around the globe this week, roughly 6 percent of its 1,800-person work force. The cutbacks, which came three weeks after the auction house’s major November sales, were part of an effort to improve the company’s financial picture amid shrinking auction revenue. They came despite a recent $1 billion cash infusion from Abu Dhabi’s sovereign wealth fund and investment company, ADQ.
“Given the challenges the market has faced this year, we’ve taken a careful look at our business and staffing levels to perform well and grow going forward,” Karina Sokolovsky, a Sotheby’s spokeswoman, said in a statement Thursday.
The layoffs, which Puck first reported Tuesday, affected people at all levels of the company, including junior employees, client services executives, back-office support staff and long-serving specialists. Sotheby’s also closed regional offices in Moscow and Bangkok. No previously scheduled sales have been canceled as a result of the cutbacks, Ms. Sokolovsky said.
The once high-flying art market has contracted over the past two years amid reduced interest rates, a volatile Chinese economy and a shrinking supply of top-quality artworks. Sotheby’s reported $2.3 billion in auction sales in the first half of the year, down 25 percent from 2023. (Its rival, Christie’s, reported a 22 percent decline in the first half of 2024; a Christie’s spokeswoman said it “presently has no staffing changes of note planned.”)
Last month, Sotheby’s marquee art auctions in New York delivered $533 million, a more than 50 percent drop from 2023, according to the art-market analytics company Pi-eX.
Some staff members were notified last week that their jobs would be eliminated; conversations are continuing this week as some employees negotiate transitions into advisory roles. In New York on Tuesday, the human resources staff summoned individuals one by one to deliver the news. (The next day, Sotheby’s chief executive, Charles F. Stewart, posted a carousel of images of himself on Instagram from his recent trip to Abu Dhabi, irritating employees and concerned clients. Stewart, who was in the United Arab Emirates to attend a financial conference, returned to New York on Wednesday, according to a spokesperson.)
Sotheby’s, like Christie’s, is a privately held company. Its owner, the French-Israeli telecom magnate Patrick Drahi, has been looking to stabilize his aggressively leveraged business empire, which is around $60 billion in debt.
Sotheby’s laid off roughly 50 people from its London office over the summer. Then, at the end of October, Sotheby’s finalized a $1 billion investment from ADQ; more than $800 million of that sum was immediately used to pay down its own $1.65 billion debt, Sotheby’s said. A spokeswoman said the decision to slash spending through layoffs was not a condition of the investment.
Sotheby’s staff cuts coincide with an aggressive expansion of its physical footprint. This year, the auction house inaugurated its new Paris headquarters with a Surrealist-themed soiree and opened a 24,000-square-foot “maison” in central Hong Kong. Last month, it announced a new outpost in the Saudi capital, Riyadh, and completed its purchase of the Marcel Breuer building on Madison Avenue, the former home of the Whitney Museum of American Art, for around $100 million. The company expects to relocate there in fall 2025, after renovations by the architects Herzog & de Meuron.
These crosscurrents — investment in branding and real estate, followed by reduction in rank-and-file staff — may reflect Sotheby’s aspiration to reinvent itself as a broader luxury business, one that relies less on low-margin art sales, according to Natasha Degen, chair of art market studies at the Fashion Institute of Technology. She said that Sotheby’s reported a profit margin of 1.7 percent in 2019, while major luxury companies typically report profits of 20 percent or more.
“Auction houses have been selling luxury objects, like handbags and jewelry, for years,” she said. “But this side of the business is becoming increasingly pronounced.” Referring to the rival auction companies, she added, “For now, fine art remains these houses’ bread and butter, but they both see the future elsewhere.”
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