Sotheby’s announced the massive layoff of 100 back-office staff members in early December. The tough decision of the internationally established art auction giant resulted from several overlapping negative factors. First, it is the rising pressure of the art market slowdown, which was noticeable in 2024. Second, it is the underperformance of recent auction sales, mainly of modern and contemporary art and Impressionist artworks, witnessed at the November sales.

Reduction in Auction Sales in 2024

Considering the large-scale negative processes in the global art market and the growing geopolitical uncertainty, further pressured by the US elections, Sotheby’s was hit hard this year. Concerns about the entity’s financial stability started arising in May 2024, when the company eliminated about 50 jobs in its London office. The Financial Times September 2024 report yielded even more alarming evidence of the auction house’s 88% decline in core earnings and a 25% reduction in auction sales at the beginning of 2024.

Signs of the Global Art Market Slowdown

A quick glance at Sotheby’s marquee sales in New York this fall offers another proof of the widely observed art market slowdown and the increasing market fragmentation, which affects even the largest auction houses negatively. The gross sales of modern, contemporary, and Impressionist art in November 2024 barely exceeded $533 million for Sotheby’s. Compared to the $1.2 billion yield recorded in November 2023, this year’s performance can be called moderate at best.

Sotheby’s Actions to Restore Business Performance

Despite multiple risks experienced by Sotheby’s in terms of internal financial issues, sales underperformance, and the growing geopolitical uncertainty that hinders investor confidence, the auction house has been addressing its issues proactively in 2024. Apart from the contestable measure of massive layoffs, Sotheby’s authorities have also concluded a $1 billion investment deal with Abu Dhabi’s ADQ wealth fund.

The deal was finalized in October 2024, giving the auction house the essential financing for recovery from its recent misfortunes. Yet, this move has come with business restructuring, with a minority stake in Sotheby’s passing to the ADQ fund and ending the period of the auction house’s exclusive ownership by the telecom magnate Patrick Drahi.

Sotheby’s has also embarked on a couple of high-rank real investment deals as part of its business diversification efforts. The recent purchase of the Breuer Building in New York, as well as the acquisition of high-end property in Hong Kong and Paris, may also boost the company’s financial performance and increase its resilience in the present-day art market conditions.