Sotheby's, the auction house, is cutting 14 per cent of its workforce as the economic downturn takes its toll on the art world.
The company is cutting 287 jobs across the world, taking its total down to 1,750. Some jobs will go in London, which along with New York, is one of Sotheby's main centres. It is also reviewing the "cost structure and strategic direction" of its online business Sothebys.com, in which it has invested $40m.
The cuts are part of a plan to achieve annual cost savings of $50m (£36m). The group will take a $13m restructuring charge in its third-quarter figures to cover the redundancy costs.
Sotheby's has been beset by recent problems, including a costly legal battle over alleged price fixing with arch-rival Christie's. A court case is due to start next month in New York, in which the US Justice Department is prosecuting former Sotheby's chairman, Alfred Taubman. The auction house has already incurred a $203m exceptional charge for its share of compensation to the victims. The allegation is that the two auction houses in effect colluded to fix commission charges to clients. Sotheby's former chief executive, Dede Brooks, has already pleaded guilty to similar charges last year.
The exceptional charges pushed Sotheby's into a $237m pre-tax loss in the year to December. In the six months to June pre-tax profits reached $22m though this was still half the level of the year before.
Bill Ruprecht, chief executive, said: "Following these changes we believe that we will be a stronger and more profitable organisation."
Sotheby's has 98 offices in 38 countries. As well as its main centres in London and New York it holds auctions in 14 other countries including Australia, Hong Kong and Italy.
Sotheby's shares jumped 37.5p to 825p. They stood at 1,650p last November and 2,625p in early 1999.Reuse content