Commercial Real Estate Layoffs Lead to Shifting Roles for Many Brokers

Abstract

Some in the industry predict that there will be more layoffs to come. For brokers in the competitive industry, continued layoffs could mean having to scramble to find a new position, shifting into a new focus, or looking outside the sector altogether. In its third quarter earnings call late last month, CBRE announced a $400 million cost-cutting plan, $300 million of which is slated to go toward permanent cuts, including layoffs. The decision came as the company's global sales revenue dropped by 11 percent, with sales revenue in CBRE's Americas region dropping by 16 percent. Two weeks earlier, JLL noted in its third quarter earnings report that it had spent $9.3 million over the quarter on severance costs, a jump from just $1.2 million spent during the same time period last year and up from $8.3 million in the prior quarter. As year end approaches, brokerage firms will have some big decisions to make about costs and staff, and there will likely be more layoffs. With another expected interest rate hike in December and most of the industry expecting a recession next year, brokers and other industry professionals should be prepared to shift to roles in the sector that might be in more demand, like workout groups or asset management, while those new to the industry may have to reevaluate their career paths, at least in the short term.