The Journey We Face

I just got off the phone with a reporter asking for my take on Foster + Partners laying off 300 employees. This is a huge reduction of nearly 25% of their work force. In recent weeks we have seen other firms such as TVS Design, Smallwood, Reynolds, Stewart, Stewart, and others of all sizes reduce staff due to the world-wide slowdown in architecture and construction. This is happening with world-class firms and regional firms including those of highest repute. Often the percentage has been in the range of 15 to 20 percent RIF.

In less than one year we are moving from full employment of the creative class that includes architects and designers to an unemployment rate of perhaps 15%. Some scenarios and business model simulations anticipate even more. A Design Futures Council roundtable reports that dozens of firms now have contingency plans in place to reduce their work force by perhaps 40 percent. Firms with the strongest brands will most likely experience less pain, but no firm will be completely immune unless they are a big player in infrastructure, sustainable design solutions, health care, adaptive re-use, or of course school remodeling and additions. It appears that the new educational facility package did not get through the U.S. Senate this week.

The Foster + Partners layoff is putting some very talented people out on the street. The firm will close its offices in Berlin and Istanbul. Some of the departing staff will pick up other assignments within a few weeks, others will form new firms, others will languish for a month or so and then adjust to options, including going back to school, learning a relevant specialty within architecture or engineering, or even pursuing related career options. No professional category is immune to this recession. But few economists in the real estate arena forecast such a bleak and fast moving downward cycle.

What is one to think? The decisions by Foster + Partners (a part of 3I Group) are an unfortunate but necessary response to the economic conditions we are in. I expect more projects to be delayed or cancelled over the next 12 to 18 months. It is a professional responsibility of firms to keep their professional practices healthy in both good times and bad.

The heart of the profession is being tested. Architects and designers — indeed the construction industry — will come out of the recession/depression stronger. But it will be a journey none of us have wanted to face.