- One of the biggest mall owners in the US is laying off 20% of the workforce in its
retail division, according to an internal memo obtained by Business Insider. Brookfield Properties owns majorshopping centers including Fashion Show in Las Vegas, Brookfield Place in New York, and Ala Moana Center, the world's largest open air mall, in Honolulu.- The COVID-19 pandemic has severely impacted department stores and
malls across the country.
Major mall owner Brookfield Properties is laying off 20% of employees from its retail division, according to an internal memo obtained by Business Insider, as the COVID-19 pandemic has forced closures of malls and department stores across the country.
"Our business has been frustrated, interrupted and constrained," wrote Jared Chupaila, CEO of Brookfield Properties' retail arm, in a memo to employees this week. "After thoughtful consideration, we have reached the heavy decision to reduce the size of our workforce to align with the future scale of our portfolio."
News of the layoffs was first reported by CNBC.
Brookfield Properties manages one of the largest real-estate portfolios in the US, with shopping centers in over 170 locations in 43 states, according to the company's website. It owns major shopping centers including Fashion Show in Las Vegas, Brookfield Place in New York, and Ala Moana Center, the world's largest open air mall, in Honolulu.
The layoffs will affect employees in the field and in corporate offices, according to the memo. The company also said that it has long planned on winnowing its real-estate assets, writing that "our experience of the last six months informs us that the opportunity to act on this plan has been accelerated and the time is now."
Since the outbreak of the COVID-19 pandemic, many brick-and-mortar retailers have seen business decline dramatically. In June, Valentino sued to terminate its lease on its boutique on Fifth Avenue in New York City, according to The Wall Street Journal. And in August, Lord & Taylor declared bankruptcy and said it was shuttering its stores after 194 years in business.
Even before the pandemic, malls were struggling as consumers turned to e-commerce, with 9,300 stores closing in 2019. But since the outbreak of the COVID-19 pandemic, the trend has intensified. A June report from Coresight Research predicted that 20,000 to 25,000 stores will close this year, per prior Business Insider reporting. 55% to 60% of those stores will be located in malls, the analysis forecasted.
Brookfield Properties declined to comment on the reduction in staff.
Read the entire memo below:
2020 has had a profound impact on us all, both personally and professionally. Our business has been frustrated, interrupted and constrained. All our constituents - retailers, lenders, communities, partners, investors, consumers, vendors, shareholders and our own employees – have been affected by the events of this year and forced to revisit their relationships with our industry and our company. While we are amid challenging times, we remain confident in the strength of our high-quality portfolio, steadfast in our positive long-term view of our industry and determined in our ability to execute our business plan.
For many years we have stated both publicly and privately our plan to reduce the size and further improve the quality of our portfolio by opportunistically disposing of assets we determine do not meet the long-term investment strategy for our core portfolio. Our experience of the past six months informs us that the opportunity to act on this plan has been accelerated and the time is now.
While many companies were quick to implement furloughs and layoffs at the onset of the pandemic, we made the conscious decision to keep all our team employed while we gained a better understanding of its longer-term impact on our company. After thoughtful consideration, we have reached the heavy decision to reduce the size of our workforce to align with the future scale of our portfolio. This reduction-in-force will affect approximately 20 percent of our employees, both in the field and in our corporate offices.
We pride ourselves on a culture built on transparency and togetherness, and we believe the right thing to do is to be up front about this decision. Beginning this morning and continuing through tomorrow, employees included in the reduction-in-force will be contacted directly by leaders from their department and Human Resources team members to discuss the process of separation and answer questions.
We hold all our team members in the highest regard. Therefore, we are providing full severance in amounts consistent with the company's policy, accelerating the vesting of pre-merger equity grants and supplying transition support including career workshops and one-on-one coaching for all impacted team members.
This business decision does not in any way detract from what each of the affected employees have contributed to our company. As future opportunities for employment become available, we will endeavor to reach out to former employees first to offer positions and welcome them back to our team.
We wish every impacted team member only the best success in their future career pursuits.