JLL laid off roughly three dozen people in its New York City office — the first such cuts at any of the big commercial services firms during the pandemic.
The Chicago-based firm made the move on Friday in the capital markets division, sources told The Real Deal. The employees worked on property sales and debt placement.
A representative for JLL did not immediately respond to a request for comment.
Last week, the company reported net operating income of $5.3 million for the first quarter of 2020, down sharply from $21.3 million during the same time last year.
Company executives said the firm had cut costs by reducing items like marketing budgets and deferring investments. Members of the global executive board cut their base salaries in half, and many senior leaders capped or deferred parts of their base compensation, they said.
“While we are currently in a strong financial position, the economic and societal challenge the world is facing is extraordinary and unprecedented,” CEO Christian Ulbrich said on the company’s quarterly earnings call last Tuesday. “And all leading companies have to be mindful about the totality of all of their actions.”
While many of the city’s biggest residential brokerages have already gone through layoffs and cutbacks, the big three commercial real estate service firms — CBRE, Cushman & Wakefield and JLL — have so far been able to stave off layoffs.
Cushman CEO Brett White said during his company’s earnings call that the larger firms’ shift in recent years to rely on continuing revenue streams have helped steady their balance sheets.
The Big 3 firms have become more reliant on fees from sources like property management instead of other lines like fees from leasing and sales that have fallen off due to the global pandemic.
He said smaller firms more narrowly focused on leasing or sales would be hit even harder than others.
So far in New York, smaller commercial firms like Meridian Capital Group, B6 Real Estate Advisors and Avison Young have laid off staff.
Cantor Fitzgerald last month reportedly directed leaders at Newmark Knight Frank to take pay cuts and eliminate positions.
JLL’s capital markets team, meanwhile, grew last year with the company’s acquisition of HFF, which had a powerful sales and debt-brokerage platform.
The new capital markets team had already seen some shakeout as several brokers left amid the merger.
Contact Rich Bockmann at rb@therealdeal.com or 908-415-5229