Hundreds of jobs at the top property agencies have been put at risk in recent weeks, with JLL and Knight Frank the latest to join a growing list of firms eyeing job cuts to reshape their post-coronavirus businesses.
The redundancy consultations are the latest example of the toll that the Covid-19 pandemic is exacting on real estate deal flow, with transactions drying up during the UK’s lockdown.
“Until now it has felt like people have been lulled into a false sense of security,” said one agent unaffected by any processes. “The sun has been shining and it has felt like an extended holiday at home, but the fallout from Covid-19 will be huge.”
JLL has sped up its strategic review of its EMEA operations in light of the crisis. Sources have indicated that this extends to as many as 200 roles in consultation.
JLL stated: “In response to our clients’ needs and the changing nature of our business, we began some reorganisation and restructuring in the EMEA region last year.
“The pandemic has accelerated the need to review our business and make sure we have the right resources in place. As a result, we had to make the decision to lay off some employees from our business in the UK.”
Knight Frank is also trimming back staff numbers to offset disruption from Covid-19, with sources pointing to up to 100 roles in consultation.
Alistair Elliott, senior partner and group chairman at Knight Frank, said: “In response to the market challenges faced as a result of the Covid-19 pandemic, we have conducted a review of our operations which has highlighted the need to make a limited number of roles across our UK business redundant.
“These decisions are never undertaken lightly but, given the extreme circumstances, are essential to future-proof the firm and ensure we are in the best possible position to continue to deal with the ongoing challenges.”
In the meantime, it is understood that Avison Young expects to make 100 job reductions, having put its entire London workforce on a collective consultation.
Cuts are likely to be split 50-50 between London, where 600-700 employees are based, and its regional offices, where it is consulting on individual roles.
Jason Sibthorpe, principal and president of Avison Young’s UK arm, said: “Navigating the business impacts of Covid-19 has been a challenge for us, as it has for our clients, our communities and the wider UK economy.”
He added: “Our company is centred around people, and these are not easy or quick decisions to make. We are incredibly proud of all of our people – for both their continued commitment to serving clients and the resilience they have shown during this unprecedented time.”
The agency will support affected employees by extending access to its employee assistance programme resources, and providing coaching and mentoring support.
Allsop has put 26 roles on consultation, equalling 10% of its workforce.
“This is a highly regrettable outcome of the Covid-19 crisis, which Allsop – like most property firms – has not been immune to,” stated the company.
It continued: “While both our auction teams have fortunately been extremely busy during lockdown, some other transactional markets in the UK are being far slower to recover.
“As we are largely a transactional business, we are inevitably having to respond to the sharp drop in volumes across some areas of the business, such as capital markets and leasing.”
CBRE has already begun a redundancy consultation with employees in its UK advisory business, potentially impacting up to 250 roles, as part of a “strategic review to optimise the structure of the business and respond to the impact of Covid-19 on market activity”.
CBRE said it will “take every opportunity to mitigate the impact of proposed redundancies” and provide the necessary support to those affected.
A statement from the agency added: “CBRE will continue to invest in the business when opportunities arise and remains well positioned to advise clients during these challenging times.”
Meanwhile, BNP Paribas Real Estate is consulting on 250 roles across the business, with an outcome expected in September. It is understood that this includes several legacy Strutt & Parker roles.
The agent expects around 100-150 jobs to be cut across business lines as a result.
The effect that Covid-19 has had on jobs within real estate is only beginning to show. With the impetus on saving costs as quickly as possible, the warning signs point to more pain to come.