April 28, 2009 / 12:01 PM / 9 years ago

UPDATE 1-Sotheby's slashes dividend, cuts jobs to manage costs

* Slashes div rate by 67 pct

* Says to cut additional 5 pct jobs in ‘09

* Says will save about $160 mln vs ‘08

April 28 (Reuters) - Sotheby’s (BID.N) slashed its annual dividend rate by two-thirds on Tuesday, and announced further job cuts, in a bid to manage costs amid a falling international art market.

The world’s largest publicly traded auction house said an additional 5 percent cut to its global workforce in 2009 on top of the 15 percent job cuts announced in 2008, would result in annual savings of about $24 million, and some $15 million in 2009.

Sotheby’s has been fighting a slowdown in the global art market, with markets for premium-quality art works turning sharply down in late 2008, forcing the auctioneer to vacate premises, reduce selling in certain markets and take up other ways to rein-in expenses.

The auction house said it will now pay an annual dividend of 20 cents a share, down from its earlier rate of 60 cents per share.

“As a result of this reduction, on an annualized basis, dividend payments are expected to decrease from approximately $41 million to approximately $14 million,” the company said in a regulatory filing.

Sotheby’s also implemented salary cuts for some senior staff, unpaid furloughs for employees in most operating locations and a reduction in US pension contributions.

Following these cost-cutting measures, management expects aggregate cost savings of about $160 million in 2009 compared with 2008, the filing said.

Shares of Sotheby’s had closed at $10.00 Monday on the new Yok Stock Exchange. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Anthony Kurian)

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