Sotheby’s lays off more than 100 staffers globally as auction sales slump
SOTHEBY’S laid off more than 100 staff members around the globe this week, roughly 6 per cent of its 1,800-person workforce. 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 US$1 billion cash infusion from ADQ, the sovereign wealth fund and investment company of Abu Dhabi, United Arab Emirates.
“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 spokesperson, said in a statement on Thursday (Dec 12).
The layoffs, which Puck first reported on 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 cancelled as a result of the cutbacks, 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 US$2.3 billion in auction sales in the first half of the year, down 25 per cent from 2023. (Its rival, Christie’s, reported a 22 per cent decline in the first half of 2024; a Christie’s spokesperson said it “presently has no staffing changes of note planned.”)
Last month, Sotheby’s marquee art auctions in New York delivered US$533 million, a more than 50 per cent drop from 2023, according to 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 CEO, 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.)
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Sotheby’s, like Christie’s, is a privately held company. Its owner, French-Israeli telecom magnate Patrick Drahi, has been looking to stabilise his aggressively leveraged business empire, which is around US$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 finalised a US$1 billion investment from ADQ; more than US$800 million of that sum was immediately used to pay down its own US$1.65 billion debt, Sotheby’s said. A spokesperson 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 New York City’s Madison Avenue, the former home of the Whitney Museum of American Art, for around US$100 million. The company expects to relocate there in fall 2025, after renovations by 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 per cent in 2019, while major luxury companies typically report profits of 20 per cent 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.” NYTIMES
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