Brookfield is planning to cut one in five jobs at its 2,000-person retail unit and dispose of an undisclosed number of properties as part of a drastic overhaul that underscores the damage the coronavirus pandemic has wrought on one of the largest us operators of malls.

In an email to staff, reviewed by the financial times, jared chupaila, brookfields retail chief executive, said job cuts at head office and in the field were necessary to align with the future scale of our portfolio.

The canadian asset manager revealed in june that it had collected only 35 per cent of the rent due on its retail properties in the second quarter, as some retailers filed for bankruptcy and others took an assertive stance with landlords.

Deprived of rental receipts, brookfield has for months been struggling to stay on top of the debt owned on its retail properties. at least seven of its malls had defaulted on their mortgages by the end of june, securities filings show.

In july, brookfield property reit a subsidiary that holds many of brookfields mall assets, which trades under the ticker bpyu renegotiated a $6.4bn credit facility with banks including wells fargo.

The lenders agreed to waive contractual clauses that could have allowed them to demand their money back immediately unless certain financial conditions, or covenants, were met. but they received major concessions in return, including restrictions on the dividends paid by bpyu, and a commitment that other parts of brookfield would lend at least $250m to the stricken real estate investment trust.

In his email to staff, which was sent this week and first reported by cnbc, mr chupaila portrayed the job cuts and property divestitures as part of a long-term strategy to reduce the size of its retail portfolio.

For many years we have stated both publicly and privately our plan to reduce the size and further improve the quality of our portfolio by opportunistically disposing of assets, he wrote.

Brookfield took control over more than 100 malls when its real estate arm, brookfield property partners, merged with general growth properties in 2018.

In november that year, brian kingston, brookfield properties chief executive, told investors that about 100 of the malls would be future-proof[ed]...[by] introducing other uses and effectively turning them into mini-cities.

The rest, he indicated, would ultimately be offered for sale. our experience of the past six months informs us that the opportunity to act on this plan has been accelerated and the time is now, mr chupaila wrote.