News
11.25.2008
For the Long Haul
New York firms gird for tougher times

The Numbers

Whether their decisions are large or small—a shift in focus from Beijing to Riyadh, or cutting down on office supplies—design professionals of every size and stripe have been taking stock. Few are willing to openly acknowledge that layoffs are already underway: The going euphemism is “belt tightening.” Around Election Day, the ranks of Skidmore, Owings & Merrill (SOM) lost 50 people, several sources confirmed; and one prestige firm took the not-so-elegant step of laying off 20 people who had all been gathered into one room.

But in interviews with over a dozen firms, including landscape architects and engineers, AN found that the economic strategizing that many New York offices started a year or two ago has paid off. At the very least, the process of planning for a downturn has helped mitigate jitters about what lies ahead.

Perkins Eastman has grown from a staff of 50 in the early 1990s to 800 in 13 global offices today, and in the past few years, the firm has focused on what principal Aaron Schwarz called “value-added service areas” including healthcare, education, senior living, and municipal developments. That has put it in a good position to pick up on a convergence phenomenon in building programs such as education wellness centers and hospitality healthcare. “We started looking two or three years ago at how to position ourselves,” he said. “We feel we are in as good if not a better place than many,” said Schwarz, adding that Perkins Eastman is still hiring, though more slowly than a year ago.

In June 2007, the partners at Gruzen Samton noticed that they were no longer seeing zoning and feasibility studies come in to the office at the same rate as before. They, too, had a meeting and decided to focus even more on senior living facilities and educational infrastructure. But an even smarter move turned out to be the decision to seek an on-call contract with the General Services Administration (GSA). Under the auspices of the GSA’s Design Excellence Program, Gruzen Samton was selected to be one of four or five firms pre-qualified for any work put out by Homeland Security’s Port of Entry from North Dakota to Maine, for up to five years. “We’re very proud we made the cut,” said firm partner Darko Hreljanovic.

Last spring, SOM invited economists into the office to talk about macro-economic issues in an effort to define more opportunities in emerging markets. However, they have found that global diversification hasn’t provided a puncture-proof cushion from economic blows. “We’ve been purposefully global for years,” said partner Roger Duffy, “but it turns out that almost no world market is immune right now.” There are a few exceptions, though: While several sources described the development market in Russia and Dubai as very shaky, Saudi Arabia is actually getting busier. “We can’t get enough people into Riyadh,” said Craig Schwitter of Buro Happold, who is working with FXFowle on the King Abdullah Financial District development, which includes over 100 new buildings. Over the last decade, the kingdom had proceeded more conservatively than its neighbors, and so hasn’t been as affected by the economic crisis.

At 65 people, Rogers Marvel Architects is no giant, but a year ago they hired a managing director to help the firm act and plan ahead like a grown-up operation. “We followed that with a lot of sit-downs to try and prepare,” said Rob Rogers, and so far all the desks are still full. One of the firm’s strategies is to sign on for “curb and gutter jobs” if there’s even a modicum of creativity involved. Noting how designing streetscapes at Battery Park City led first to streetscape security for the New York Stock Exchange and then to a masterplan for the Pentagon, Rogers said, “We launched in the 1990s at a tough time when we had to have good habits and we’ve stayed aggressive and less picky.”

Three weeks ago, Lewis.Tsurumaki.Lewis had the inevitable meeting about cutting back on office surplus. The firm knows how to keep it lean with a staff of 12 and a handful of academic projects, which so far have all been reconfirmed. Fee negotiations, however, have become more circumspect, said Marc Tsurumaki, estimating that the going rate is off about 25 percent from last year. While all three partners in the firm are already teaching, they will probably start entering competitions—at least the ones rooted in reality. Like many, Tsurumaki is trying to figure out the bright side: “We see it as a good opportunity to reconsider things and even re-conceptualize the firm,” he said. “We’re wondering if there are even more inventive ways to get back into design-build.” At 42, Tsurumaki experienced the last downturn in 1991, when he was just out of school and working for Joel Sanders. “He’d be off teaching and I would be the only person in the office when these 40-year-old architects came by to drop off their resumes,” he recalled. “I just sat there hoping I would never be one of those guys.”

Julie V. Iovine