Sotheby’s and Christie’s have shrunk their West Coast operations. They have fired staff and are down to about five employees apiece. (UPDATE: The houses each employed upwards of 20 employees in LA in the respective offices in the late 1990s)

Both firms have hired real estate agents to sublease their offices in order to move to smaller quarters.

Sotheby’s office runs without a receptionist and is open “by appointment only,” as indicated by a new sign hanging on the front door, and a newly installed doorbell, according to West Coast sources.

While the auction houses cut costs to staunch losses, others see a growth opportunity.

As reported here last week, the Dallas-based Heritage Auction Galleries will be opening a new Los Angeles office in 2010.

Art dealer Larry Gagosian has hired architect Richard Meier to double the space of his Beverly Hills gallery, having re-negotiated his lease in the wake of the real estate crunch. Gagosian staffer Candy Coleman runs a La Jolla office.

Gagosian got his start selling posters and limited edition artworks in L.A. LA Times reports on the Meier expansion here.

The auction houses say Los Angeles continues to be an important venue.

Christie’s host sales exhibitions and educational events. Their Annenberg diamond, a 32-carat ring estimated to sell for up to $5 million, is among glitzy items slated to visit the Beverly Hills office.

Sotheby’s also hosts traveling exhibitions, and is a major sponsor of the LA County Museum and Hammer Museum.