Layoffs at Sotheby's

The Wall Street Journal is reporting that Sotheby's plans to layoff a "modest" number of workers by the end of the year. The announcement stated some staff would be re-assigned to growing departments or laid off and is part of its long term strategy to compete in the current marketplace.  The report did state the expected layoffs would most likely be from back room operations.

The Wall Street Journal reports on the layoffs

Sotheby's  said it plans to lay off a "modest" number of its global workforce by the end of the year as it takes a harder look at its operations, according to a statement issued by the auctioneer on Thursday.

The announcement follows a staff meeting held at Sotheby's New York headquarters Thursday morning in which executives told staff that an undisclosed number of its workers would be reassigned to expanding departments or laid off, according to staff members who attended the meeting.

The company said the job cuts are part of a "long-range" process that began earlier this year in which the company took a closer look at which areas of the auction house were growing or lagging. "Some departments will be expanded and new positions created," the statement said, "while other areas will see modest staff reductions by the end of the year. Our goal is to build on the strong results we have been achieving, continue to increase our ability to compete in the marketplace, and better serve our clients."

One staff member said he expects the layoffs would come mainly from those working in back-office departments like payroll, shipping and catalog production. The staff member said executives at the meeting gave the impression that higher-profile sales staff and specialists who directly assist collectors wouldn't be affected. During the recession, the company laid off nearly a fifth of its workforce, but it has lately bolstered its ranks, particularly in Asia.

Another staff member said they felt that the number of layoffs would rank in the dozens.

The timing of the layoffs, on the heels of hedge-fund activist Dan Loeb's arrival on Sotheby's board, suggests the house is taking a harder look at the fine print of its operations across the board.

Staff members said they weren't surprised to learn the company was enacting belt-tightening maneuvers because Mr. Loeb had campaigned publicly for a leaner, more profitable company in his presentation to shareholders this spring.

The shake-up comes at a time when art prices at auction are soaring, thanks to an influx of newly wealthy buyers. On Tuesday, Sotheby's said that, as of July 14, it had auctioned $3.3 billion worth of art during the year, up 29.4% from a year ago. Rival Christie's International PLC said it auctioned $3.6 billion in art during the first half of the year.

Source: The Wall Street Journal