Operator: The next question comes from the line of Anthony Paolone with JPMorgan.
Anthony Paolone : My first question relates to Work Dynamics, and I’m just trying to put together some of the comments around project management, I guess, tying to leasing activity, but also some of the wins in workplace management. I guess bottom line, do you have visibility on growth in Work Dynamics revenue for ’23?
Christian Ulbrich : Well, we are — first of all, we are very happy with the performance of our Work Dynamics business in 2022. And we expressed at our investor meeting in November that we are confident that we will be able to expand margins in that business pretty consistently over the coming years, and nothing has changed about that view over the last couple of months. So first of all, I would say we put margins over top line growth within that business. But we are — we continue to be confident about that top line growth. What is important to understand here, despite the fact that the return to office is still relatively slow in the U.S. that those companies who are outsourcing their real estate to service providers like us are usually also those companies who are very active on expanding and doing M&A.
So we will see more buildings coming to us from our existing clients overall despite a potential reduction in their office footprint per person per employee. And so that will drive the top line growth. Then as I alluded to earlier, that whole notion around the E of the ESG is driving a lot of activity from our clients, which helps us to drive further top line growth. So there are numerous services which we offer to those clients and all of their activities is helping us to grow our top line.
Anthony Paolone : Okay. So I mean — is it fair to say that, that Work Dynamics should be probably the way you’re seeing things right now, the brightest spot in the business segments for ’23?
Christian Ulbrich : Well, it depends how you define brightest spot. It’s a very important part of our business, and the proportion of that business will continue to grow over the next couple of years. But as you know, once the transactional markets are returning to a more normalized activity probability of our Capital Markets and our Leasing business tends to be still significantly higher. So I’m careful to make a category around what’s brightest here.
Anthony Paolone : Okay. I understand. And then with regards to the $140 million of cost saves, can you give us a little more context around whether you see those as being permanent or are they coming by way of lower, say, T&E costs just due to less activity levels? Just any more depth there would be great.
Karen Brennan : Sure, I’ll take that one. So that’s $140 million on a run rate basis. And again, approximately $125 million of that will come through in the calendar year 2023. It’s primarily related to reductions in compensation and benefits from the restructuring of our business, so reductions in headcount. And as we look at where that’s from, it’s really primarily non-producer headcount, and it’s associated with positions that we really no longer require as we shifted our business operating model from a geographic to the business line focus.
Anthony Paolone : Okay. Got it. And then just last one, real quick. You talked about just being careful with capital allocation. Can you just comment on just any expectations for investments into JLL Tech and CapEx for the year?
Christian Ulbrich : Well, we continue to invest into the long-term performance of JLL, and we have a strong conviction that it is very important to have the leading tech platform within our industry. We believe we have it, but we want to stay ahead of our competition with that, and so we will continue to invest there. But we are applying the same kind of discipline around those investments as we apply to all other investments we do. They have to create shareholder value — and so they have to compete for capital as all the other areas of our business have to compete for capital.
