• ARTnewsletter Archive

    Sotheby’s and Christie’s Initiate Broad Cost-Cutting Measures

    Christie’s and Sotheby’s have announced cost-reduction efforts that will include an unspecified number of layoffs.

    NEW YORK—Christie’s and Sotheby’s have announced cost-reduction efforts that will include an unspecified number of layoffs.

    In a statement issued on Jan. 12, Christie’s announced that it has begun a “company-wide reorganization review, which includes the possibility of significant staff reductions, not renewing many consultants’ contracts and the continuation of other cost reduction initiatives.”

    Early last month, in a filing with the U.S. Securities and Exchange Commission, Sotheby’s said the executive committee of its board of directors had approved a restructuring plan that would include layoffs. “Beginning in 2009,” the filing states, “the restructuring actions approved in the fourth quarter of 2008 will reduce annual salaries and related costs by approximately $7 million, when compared to 2008 levels.”

    At the major fall auctions of Impressionist, modern and contemporary art last November, volume fell sharply. Sales at Sotheby’s and Christie’s yielded a total of $786 million, a 53 percent drop from the $1.69 billion total for the previous fall auctions. Both houses indicated that they would return to basics in the months ahead and sharply curtail their use of auction guarantees, payments made to consignors regardless of how their lot performs at auction.

    In November, Sotheby’s reported a third-quarter loss that it said was “largely due to a higher level of principal losses on auction guarantees.” In its report, Sotheby’s said it would continue “to substantially reduce its use of auction guarantees until stability is restored in the global financial and economic markets” (see story below).

    Layoffs notwithstanding, Christie’s recently made a key appointment in its contemporary-art department: Francis Outred, who was previously head of private sales and a director of the ­contemporary-art department at Sotheby’s, joined Christie’s last week as head of Postwar and contemporary art in Europe. Outred had been on forced leave because his contract with Sotheby’s prevented him from working for a competitor for six months. Pilar Ordovas has been promoted to deputy chairman of Christie’s contemporary-art department.

    Meanwhile, a December report on a Financial Times blog that Christie’s—which is owned by French billionaire art collector François Pinault—might be up for sale was denied by a spokesperson for Pinault’s holding company, Artemis, as well as by several London bankers familiar with the house’s operations.