The FINANCIAL — Sotheby’s disclosed in a regulatory filing that it currently expects that voluntary separation incentive programs will result in a net reduction of approximately 5% of its global headcount of approximately 1,600 employees prior to the implementation of the Programs, according to Nasdaq.
The company noted that employee transitions under the programs will commence on December 31, 2015 and occur throughout the coming year.
Sotheby’s expects to recognize a charge of approximately $40 million in the fourth quarter of 2015 as a result of the Programs. This charge includes $4 million of accelerated equity compensation expense and $5 million related to 2015 incentive compensation that would have been paid to participants had they remained with Sotheby’s. Taking into account the incremental net cost and expected net savings resulting from the Programs on their own, Sotheby’s expects a payback period of approximately 18 months.
The Programs were offered to Sotheby’s employees in jurisdictions where it was practical to do so.