Reports surfaced earlier this year that Sotheby's was preparing to lay off up to 50 members of its UK staff. Sotheby’s operations in the UK have been impacted due to Brexit. However, as the months passed, there were no further developments, and Sotheby’s seemed confident, with a series of new real estate expansions and a US$1 billion investment deal from the UAE designed to offer the auction house long-term stability.

However, it was reported on Tuesday that around 100 staff members have been laid off from Sotheby’s, all from New York, the location of Sotheby’s headquarters. This is seen as the opening component within further planned layoffs that will take place across all of Sotheby’s global offices. This seems to be a highly comprehensive series of cutbacks. The Modern and Contemporary African Art Sale was scrubbed from their calendar, and overseas offices are being shuttered. 

It appears as though the cuts were not just centered around a specific group, unlike the layoffs Sotheby’s held in the summer of 2023, which targeted at least 10 senior specialists and employees. Instead, the known departments that had staff laid off included the impressionist, modern, antiquities, Americana, and Japanese departments, according to Mario Maneker from The Puck.

The positions laid off were also broad, from multi-decade Sotheby’s veterans to junior workers, and client strategy to technology. Some more senior Sotheby’s salespeople are seemingly being offered the chance to become advisors, but how many employees are being offered this is unknown. 

Sotheby’s did say that many of the international closures were planned well ahead of time, including the shuttering of the Moscow office. Regardless, the layoffs represent a loss of at least 6% of its total employee headcount of 1,800 workers. 

It's been circulated around the auction world that Sotheby's is experiencing financial difficulties, having to give its employees IOUs instead of bonuses and delaying the payment of contracted staff such as shippers. Sotheby’s executives have even voiced concern that paying their employees on time may become difficult, according to the Wall Street Journal. 

These layoffs and financial issues also follow a leaked report from September that stated Sotheby’s core earnings had declined by 88% and its auction sales had dropped by 25% in the first half of 2024. The report also highlighted that over the same period, Sotheby’s revenue dropped by 22%, attributed to the slashing of buyer premiums. The company also has a debt-to-earning ratio of about 10 times and a total debt of around US$1.8 billion.

Some experts have placed Sotheby's financial woes on not just weaker markets, compared to previous years, but also the strategy the company has adopted.  

The most notable policy change is the restructuring of fees to a more open and lower fixed premium system. When implemented in early 2024 it was quite a shock since it was such a radical change, with industry specialists stating it contributed to the decline in revenue. highlighted in the September 2024 report. An industry insider stated on the matter that  “everyone thinks that Sotheby’s has lost the plot a little bit,” in a quote to ARTnews.

As for Patrick Drahi, he purchased Sotheby’s back in 2019 for US$3.7 billion, taking it off the NYSE. Ever since then, he has seemingly sought to offload some of his stake in the auction house, first through an unsuccessful bid at listing it on the stock market and now through selling off parts of the corporation, as part of an ongoing crisis for Drahi’s main corporation, telecoms giant Altice which is US$60 billion in debt, according to Western media outlets. 

Dubai's investment into Sotheby’s worth US$1 billion is seen as part of the strategy for Drahi to alleviate any debt incurred by the auction house and potentially dilute his involvement in the brand. It is however unclear if Sotheby’s staff cuts were a requirement of Dubai’s investment and a precursor to an increase in Dubai’s involvement and investment in the brand.

Sotheby’s rivals have noticed the firm’s issues, with a Christie’s spokesperson stating, “No staffing changes of note planned.” Phillips also announced that around 5-6 people will be laid off or moved this year, but that is all.

This year has also seen the departure of several of Sotheby's top talents, the most notable of which is Brooke Lampley. The former Head of Global Fine Art, she left for Gagosian to become a senior director at the art gallery. In the past she helped them secure the Emily Fisher Landau collection, which brought in US$406.4 million, and Linda and Harry Macklowe’s US$922.2 million collection, the second most expensive single collection in the world. 

This shift in Sotheby's modern and contemporary art operations has also been reflected in Hong Kong this year, starting with a major reshuffle when Elaine Holt replaced Alex Branczik, who returned to New York, as Sotheby’s Hong Kong’s Chairman and Head of Modern and Contemporary Art. Recently, another senior Sotheby’s Hong Kong staffer, Felix Kwok, Head of Modern Art, has departed the organization. 

This trend of senior staff such as Lampley and Kwok departing is compounded on, and related to, a larger-scale issue of an overall weaker less hot art market, which Sotheby's is having to operate within.

It should be noted that at the moment Sotheby's is experiencing a massive strategic shift into new strategies and with new partners, and as a company, it is charting new territory for the industry. Importantly, Sotheby's does not seem to be paralyzed by this sudden departure in staff; instead, it is in the process of expanding operations. 

Part of this revamp of Sotheby’s image and business has been a spree of high-cost property expansions, with Sotheby’s opening new offices and retail spaces in Shanghai (2022), Hong Kong (2024), Paris (2024), and New York, which is currently being renovated. Additionally, some of these new offices are exploring new concepts for the auction house. The new location in Hong Kong is dedicated to retail, with aspects of the new Paris office also having space meant for private sales. 

Sotheby's is also entering the niche of auctioning more popular culture or items from the world of sports. Their deals with the NBA and Fanatics to sell basketball jerseys and trading cards, respectively, showcase their interest in moving into an auction niche with proven results, while bringing their expertise and resources with larger scale operations. 

Furthermore, the new deal with the UAE sovereign wealth fund recently went into effect, with the main goal of that deal being to alleviate part of Sotheby's US$1.8 billion in debt and invest in future long-term operations and projects. Additionally, programs such as Sotheby's Financial Services' new loans are also in place to further improve the products offered by that branch of the company.