Dive Brief:

• Brookfield Properties has made cuts in its North America commercial development group, laying off less than 100 people out of its 1,400-employee staff, the company told Multifamily Dive. CoStar first reported the news. 
• A Brookfield Properties spokesperson told Multifamily Dive that the reductions were “a result of a strategic review following the recent combination of several of our development divisions into a single one covering all of North America.” That restructuring should allow the company to streamline reporting structures and deliver the $2.5 billion it has in development efficiently and on time.
• Brookfield Properties, part of New York City-based Brookfield Asset Management, did not share how the cuts would affect multifamily development with Multifamily Dive. The company has more than 30,000 real estate operating employees worldwide.

Dive Insight:

As financing costs have risen, developers have postponed multifamily projects. CoStar says roughly 220,000 multifamily units in the U.S. have started construction this year after a record-breaking roughly 727,000 apartments broke ground in 2022.

Without as many projects to start, both developers and contractors are scaling back. Recently, Australia-based developer and contractor Lendlease laid off about 10% of its global workforce, the Sydney Morning Telegraph reported. A spokesperson for the company confirmed the news to Construction Dive.

The layoffs affect 740 workers total, or about 5% of Australian staff and 15% elsewhere across the world, with estimates they will save the business AU$80 million ($54.4 million) to AU$100 million in costs, the Telegraph reported.

Multifamily-specific companies have also made layoffs. Miami-based workforce housing developer Resia laid off 25% of its workforce, roughly 100 employees, in December 2022 as it adjusted its overhead to “new macroeconomic conditions,” according to its Brazil-based parent company home builder MRV’s 2022 annual report.

With the job cuts, Resia’s Q1 2023 general and administrative costs should be 25% lower than in Q4 2022, according to the annual report. “They occurred mostly in our development, design and construction teams as we adapted our workforce to reflect the revised number of units we will be delivering this year,” Ernesto Lopes, the president and CEO of Resia, told Multifamily Dive.

The layoffs are also making employees around the industry nervous. In the past, it might have taken Melanie Robb, a Pittsburgh-based consultant who helps multifamily firms attract and retain talent, a few tries to receive a callback from a potential recruit about a new job. But now people are reaching out to her or calling her back immediately.

“People are just more willing to listen because they're a little bit worried,” Robb said. “They're hearing about layoffs in the industry. They're hearing about things tightening and they're just open to listening more.”

For companies that are in growth mode, layoffs provide an opportunity to add talent. “If a company is smart, they would say, ‘Hey, let me pick up this person. I'll carry them for a year, even if we're not doing anything because we’re getting such a great person,’” she said.

“There are some awesome people on the market.”

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