Sources: Other Brokerages to Follow C&W in Cuts

NEW YORK CITY-Due to Cushman & Wakefield Inc.’s recent reduction of a reported 200 positions nationwide, some industry sources say we are sure to see more layoffs in the brokerage world and across the industry. The reason, sources say, is overall market weakness, the economic environment and downturn in property sales.

A Cushman & Wakefield spokesman confirms job reductions, but did not confirm the reported 200 job loss amount, nor could he detail how many people will be affected in each market, region or specific group. He did say, however, that “on a local level, market by market, it’s not a significant number of people.” He explains that “a small percentage of jobs will be affected.”

The spokesman continues that of the approximately 6,000 employees in the US, “some markets are reducing staff and in some markets we continue to add staff.” As far as the local New York City market, he says that he cannot comment on the Manhattan office as far as level of detail, but that New York City is “one of our largest markets.”

Hugh Finnegan, an attorney in the real estate group at Sullivan & Worcester LLP, tells GlobeSt.com that he is not at all surprised by Cushman & Wakefield’s cuts because “all activity is way down. There are fewer leases—especially large leases. And there are fewer sales.” He also says that he expects that there will be more cuts to come from “all the major brokerage firms and the numbers will increase. The smaller firms may be able to survive longer. They are a bit more active and they do not have the same overhead.”

An anonymous source agrees with Finnegan that these job losses come as no surprise and says that the same thing is happening across the industry, pointing to CB Richard Ellis Group Inc. job cuts. “All the companies are restructuring to stay competitive,” the source says. A CBRE spokesman tells GlobeSt.com in a statement that the firm “regularly reviews its operations to ensure that our costs are aligned with the business environment. In light of the market weakness this year, we have been focused on cost containment in all aspects of our business. Unfortunately, our efforts have included modest headcount reductions. These actions are being implemented prudently to preserve our core strengths. In most offices, the effect of such reductions is minimal, and we remain well positioned to continue serving our clients during these turbulent times.”

The spokesman would not provide details or specific numbers at this time. Also, according to a report, Jones Lang LaSalle has cut employees as well due to a “wider, strategic cost reduction exercise to ensure the firm’s ongoing competitive market position.” JLL did not respond to GlobeSt.com queries for comment by deadline. As GlobeSt.com reported in September, Chicago-based JLL decided to lay off between 60 to 80 employees in England.

Not all firms are cutting back, despite the tough times. Mark Jaccom, CEO of FirstService Co.-owned Williams Real Estate, tells GlobeSt.com that “despite that many other real estate firms are actively thinning their ranks, Williams Real Estate will intensify its recruitment efforts and attract the most talented professionals in the real estate industry.” Just last week, as GlobeSt.com reported, the previously revealed partnership between Toronto-based FirstService Corp. and GVA Williams closed.

The anonymous source tells GlobeSt.com that the industry is constantly looking at different areas to cut costs in order to be more profitable and pay off debt. The source warns that job reductions at brokerage firms will most likely affect public firms more so than private firms. “Public companies are under more pressure than private. They are large, mainly salary based, and shares have already been affected…there has been staggering drops,” the source says.

The C&W spokesman tells GlobeSt.com that the firm doesn’t anticipate any further reductions at this time. “With our global scale and diverse client base worldwide, we have been able to navigate a slower business environment with a limited revenue loss year to date,” he says. “But the outlook of the economy has changed in recent months, and in order to effectively address that environment, we have to reduce our expenses, which includes the restructuring of jobs.”

The source continues that “as a private firm, we have low levels of debt.” He says that these types of initiatives will help the firm “maintain a stronger and more effective platform in this economy, and will help us to capitalize on opportunities and provide the best service to our customers.”

Another industry source, who also spoke to GlobeSt.com anonymously, explains that they saw these industry job cuts coming when “brokers at some firms had stopped getting draws from their firms (a cash advance on commission).” Although the source would not name specific firms, the C&W spokesman assures GlobeSt.com that “it is not something we are doing.” The source continues that “like everything else in this cycle, the layoffs are all happening very quickly.”

Grubb & Ellis Co., another large brokerage firm, chose not to comment to GlobeSt.com when asked queries on this particular story.