Reuters details Sotheby’s announced cost cutting on the dividend side and through reduced head count and compensation:
Sotheby’s slashed its annual dividend rate by two-thirds on Tuesday, and announced further job cuts, in a bid to manage costs amid a falling international art market. The world’s largest publicly traded auction house said an additional 5 percent cut to its global workforce in 2009 on top of the 15 percent job cuts announced in 2008, would result in annual savings of about $24 million, and some $15 million in 2009. [ . . . ] The auction house said it will now pay an annual dividend of 20 cents a share, down from its earlier rate of 60 cents per share. “As a result of this reduction, on an annualized basis, dividend payments are expected to decrease from approximately $41 million to approximately $14 million,” the company said in a regulatory filing.
Bloomberg adds this quote to explain the cost issue:
“People are reluctant to sell at the moment. They want to hang on to their tangible assets,” Alan Hobart, director of the London-based Pyms Gallery, said in an interview. “Both auction houses thought globalization was the way forward and they’ve stretched themselves to limits beyond their control. They’ve lost a lot of money and they have to claw it back quickly.”
Sotheby’s to Slash Dividend, Plans More Job Cuts (Bloomberg)