Sotheby's Buyout Program Will Eliminate 5% of 1,600 Employees

  • Company will recognize a charge of about $40 million
  • Auction house said this month it wouldn't resort to layoffs

Sotheby’s expects a buyout program to result in a 5 percent net reduction of its 1,600 employees.

The company will recognize a charge of about $40 million in the fourth quarter as a result of the buyouts, according to a filing on Monday by the publicly traded auctioneer, which is under pressure from investors to improve profitability.

Sotheby’s said earlier this month it wouldn’t need to resort to layoffs. The charge includes $4 million of accelerated equity compensation and $5 million related to 2015 incentive compensation that would have been paid to participants had they remained with Sotheby’s, according to Monday’s filing.

The departures will start on Dec. 31 and continue throughout 2016, according to the filing. The company declined to comment on the individuals and departments affected by the buyouts.

Sotheby’s shares gained 2.5 percent to close at $26.51 in New York prior to the filing. The stock is down 39 percent this year.

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