HFF, which brokered the $613 million financing for Extell’s Riverside South last year, said it cut 10 percent of its workforce and slashed the salaries of its top executives, part of a plan to cut $9.8 million in fixed operating expenses.
The cuts by the Pittsburgh-based parent company of Holliday Fenoglio Fowler come just three months after a cost reduction plan at the commercial equity and debt brokerage in January, when the company slashed 57 jobs, or 12 percent of its nationwide workforce.
Combined, the cost cutting has brought HFF’s staff down to 389 nationwide, representing a 21 percent cut from its peak levels in September 2008, when it had 490 employees.
“It’s very difficult to find capital and get a deal done in these days,” said Myra Moren, director of investor relations at the firm, which arranged a $94 million refinancing deal at Riverbank West rental building at 560 West 43rd Street in January. “When you look at a company that’s functioning now when the volume is significantly lower, we had to right-size based on the volume we’ve got.”
As part of the cost cutting efforts, HFF said that chief executive John Pelusi will reduce his base salary by $150,000, or 33 percent, which follows a $150,000 salary cut on Jan. 1, 2009. In total, Pelusi’s salary will drop to $300,000 from $600,000 in 2008.
Salaries of all of the company’s office heads were reduced by 25 percent April 1, which followed prior salary reductions of 15 percent to 25 percent. In addition, most of the company’s office heads have agreed to have their bonuses eliminated. These cuts will save the firm about $1.3 million, compared with 2008 expenses. The firm has 17 offices nationwide.
The company has also suspended matching contributions for its 401K program, which will save $1.1 million, and has cut salaries of some support staff, a savings about $600,000.
The company’s Westport, Conn.-based office, which has one senior level official working there, will be consolidated into its New York office, which has about 25 staff members. HFF said the cost savings in New York would not be material to the bottom line.
Moren said she did not have any information about the number of job cuts specific to the New York office.