JLL is joining larger rival CBRE in saying it's looking to cut jobs during the rest of the year as commercial property brokerages clamp down on expenses amid steep declines in investment sales, lending and other transaction revenue.
The world's second-largest commercial property brokerage by revenue revealed Wednesday the process of looking at reductions as part of the company's global plan to prepare for what it expects will be several months of slow real estate activity in the first half of 2023. On Nov. 2, JLL reported that it spent $21 million in the first nine months on severance and other employee-related costs, but it didn't directly discuss any staff cuts at that time.
On Wednesday, the Chicago-based company held a presentation on its long-term growth strategy and mentioned job cuts at the company. In response to subsequent questions, JLL issued a statement after the session saying it "is continuing with measures which were already underway to align our operational structure with our global transformation and reinforce our focus on managing costs. These actions may include the difficult but necessary decision to make specific roles within our operation redundant."
JLL didn't respond to requests to provide details on how many jobs it is looking to cut, what regions and business lines would be affected by the reductions or how much it expects to save.
During the presentation, Chief Resource Officer Laura Adams said: “You’ve heard us talk today about the business transformation and the journey that we’ve been on. As far as that relates to our people, it has provided us an opportunity to look at ways we can operate more efficiently. Unfortunately, that may have some impact on a small percentage of our people, of which we’ll treat with the utmost of care and respect.”
The company reduced its full-year outlook this month as severance costs surged in the third quarter and it joined rivals in posting sharp declines in real estate lending and sales.
The company spent $9.4 million in severance and other employee-related costs in the third quarter, up from $1.2 million for the same time a year earlier. The $21 million spent in severance in the first nine months of the year was up from $2.1 million for the year-earlier period.
Dallas-based CBRE, the world's largest commercial real estate brokerage by revenue, last month announced $400 million in cuts through planned headcount reductions and other cutbacks.
CBRE, JLL, New York-based Newmark and Toronto-based Colliers all lowered projected earnings growth for the full year over the past few weeks. JLL executives said they now expect 2022 earnings growth to come in below the 16% to 19% projected earlier this year.