Vornado Announces Layoffs, Leadership Shake-Up Amid Cost-Cutting Measures
Vornado is cutting dozens from its staff and making a host of changes in the C-suite as it embarks on a plan to reduce overhead by $35M each year.
The real estate investment trust announced Tuesday that the company's president, Michael Franco, will take on the additional position of chief financial officer. He is replacing Joseph Macnow, who has been CFO and chief administrative officer, but is stepping down and will continue as a senior adviser to the company.
Thomas Sanelli is being promoted to finance and chief administrative officer. Matthew Iocco will continue in his existing position as chief accounting officer. The REIT also said it plans to lay off 70 workers.
The personnel changes will take effect at the end of the year, per the release. Macnow didn't immediately return a request for comment, and Vornado representatives declined to comment beyond the release.
The REIT, led by Chairman and CEO Steven Roth, was part of Bisnow's analysis of the levels of gender and racial diversity at its upper echelons last month, which found the company's seven corporate officers are all White men. The firm in March appointed a Black woman, Beatrice Hamza Bassey, to its board, joining two other women on the 10-member governing body.
The firm now plans to reduce overhead by $35M each year, which includes compensation reductions and the workforce cut. At the end of last year, it employed about 4,000 people, according to its 2019 annual report. The cost-cutting comes as the company bears the economic brunt of the coronavirus pandemic.
Last quarter, the REIT pulled in nearly $53.2M in profit — down from $322.9M in the third quarter of 2019. Vornado wouldn't have taken a substantial loss in the quarter if not for $591M in quarterly condo sales at its luxury 220 Central Park South condo tower. It has already written down the value of its share of a major portfolio of Fifth Avenue and Times Square retail by $409M this year.
“Our financial results, as well as our peers’, are suffering. But it's important to appreciate that today's quarterly results are a reaction to a short-term crisis and are certainly not predictive of the future,” Roth said on his company's earnings call last month.
“We are in the midst of a once-in-a-century pandemic. Every medical scientist worldwide is working 24/7 on therapeutics and vaccines. So it is our hope that we can win the battle with this disease in months, not years.”