Vornado Realty Trust is reducing compensation and cutting 70 staff members as part of a strategy to save approximately $35 million annually, according to an announcement from the firm.

The cost-reduction strategy is a response to ongoing operational challenges in the company’s portfolio. In the fourth quarter, Vornado expects to see a $23 million reduction in net income due to an estimated severance and other reduction in force related expenses.

Vornado is also re-shuffling its executive team. Most notably, the current CFO and chief administration officer Joseph Macnow is stepping down. He will remain a senior advisor at the firm. Vornado president Michael Franco will succeed Macnow in addition to maintaining his current role as president.

The pandemic has forced many companies to tighten overhead costs. Earlier in the year, REITs responded to the dramatic market shift by reducing executive salaries. In many instances, the pay reductions were significant. CEOs took a 50% cut in salary, on average, and other executives and directors took a 25% cut in salary. These salary cuts are in place through the end of the year.

In June, a report from professional services firm FPL Associates, found that 16% of publicly traded REITs reduced compensation packages. These salary cuts have targeted top leadership, including CEOs. Like Vornado, REITs have also furloughed, laid off and suspended dividends in addition to cutting executive pay and reshuffling titles. While the report noted that keeping a strong leadership team to navigate the uncharted waters of the pandemic was important to survival, with the significant reduction in earnings, cash flow and stock prices, most firms agreed that the sacrifice must be shared.

While all REITs have experienced challenges during the recession, hotel REITs have reported the most reductions in compensation compared to other sectors. As of June, 12 of 17 hotel REITs had announced pay cuts.

Newmark Group, Simon Property Group, Vornado Realty Trust, CBRE Group and Cushman & Wakefield were among the publicly traded real estate companies to reduce executive pay at the start of the pandemic in order to conserve cash. Newmark, for example, cut the $1 million base salary of chairman Howard Lutnik and CEO Barry Gosin by 50%.