Sotheby’s Dividend Going, Going Lower

Sotheby’s (BID: 27.54 +2.76%) announced today that they are cutting their quarterly dividend by 67% to $.05 per share.

 

The dividend cut reduces Sotheby’s current dividend yield from 6.0% to 2.0%.

 

The dividend cut is part of broader costing cutting measures the auctioneer is implementing as art sales decline in the face of a global recession. Sotheby’s also plans to reduce their workforce by 5% after cutting 15% of jobs last year.

 

“Management expects to achieve aggregate cost savings of approximately $160 million in 2009 versus 2008, to be achieved in direct costs of services, marketing expenses, salaries and related costs and general and administrative expenses,” Sotheby’s said today in a regulatory filing.

 

The markets responded positively to the cost cutting announcements, sending Sotheby’s shares up 11.1% to $11.11. Since the beginning of the year, the stock has gained 25% as it has easily outpaced the 8% decline in the Dow Jones index.

 

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