Marcus & Millichap plans to lay off 20 percent of its workforce as the publicly traded commercial real estate brokerage goes through a restructuring.
The company, which is headquartered in Calabasas and has a market cap of $1.12 billion, revealed its pandemic response plan in a May 11 public filing. Part of the plan was “a reduction of the company’s employee workforce of approximately 20 percent,” which comes to about 175 of an 877-person workforce.
The layoffs affect salaried staff. They would not impact brokers, who are independent contractors that earn their keep from sales, debt and leasing commissions.
The company has reported 53 of these layoffs to the California Employment Development Department over the past two weeks.
The affected employees mentioned in state filings are scattered across California. The head office in Calabasas saw the most pink slips, at 19. The layoffs are listed as temporary, but a return date for the workers is not provided.
Marcus & Millichap’s announcement comes as commercial brokerages nationwide face an economic disaster that has thrown into question the demand for office, retail, and pretty much any non-residential space. Eastdil Secured and JLL each announced layoffs of more than 30 employees earlier this month.
A Marcus & Millichap representative responded to questions by pointing back to the company’s public reports, and stating, “Despite unprecedented challenges that COVID-19 presents for the country and business in nearly every sector, we remain focused on the health and well-being of our team and clients, and our continued delivery of industry leading services.”
The Securities and Exchange Commission filing, part of the company’s quarterly earnings report, does not say what positions will be eliminated or how the layoffs will be carried out. CEO Hessam Nadji did not mention the layoffs during the earnings call, and no one asked a question about them, according to a call transcript.
The filing does note that in “response to this period of business disruption,” we “instituted various controllable expense reduction initiatives” including base salary reductions for senior executives, management and key personnel, furloughs and layoffs “to preserve our balance sheet and financial position.”
These reductions include a 25 percent base salary cut for Nadji, and a 20 percent cut for other executive officers.
Marcus & Millichap went public in 2013.