x Abu Dhabi, UAETuesday 25 July 2017

Nakheel cuts 400 more jobs in overhaul

The redundancies were staggered over the past two weeks and are on top of the 500 jobs that were cut last December, a source close to the company said.

Nakheel, a property developer owned by Dubai World, has made about 400 more staff redundant as the company continues an overhaul brought on by the downturn in the property sector. The redundancies were staggered over the past two weeks and are on top of the 500 jobs that were cut last December, a source close to the company said. "We were given a redundancy package of six months' pay" one former staff member who was laid off last week said.
The economic downturn has battered nearly every Dubai developer, with property prices and sales falling sharply. Developers, who were mostly reliant on off-plan sales to finance the construction of their projects, have struggled to collect payments, leading to rising defaults, while payments to suppliers have been delayed. Nakheel yesterday confirmed the redundancies as the company continues to readjust its current business objectives to match supply and demand in the most effective way, but declined to say how many jobs have been cut.
Nakheel recently merged a number of its business units, which are now undergoing resource restructuring to ensure efficiency and optimisation of skill and talent, the company said. The source said the bulk of the cutbacks affected the company's asset management and design (NAMAD) division, a unit that was formed only in February after the the design group and universe master planning divisions were merged. The source said Imdaad, a facilities management (FM) firm also owned by Dubai World, would now manage most of the infrastructure and facilities across Nakheel's projects.
But Nakheel denied this, saying: NAMAD's facilities management team is functioning as usual. Imdaad has been providing FM services to Nakheel as a service provider in various communities following the usual practices of engaging a service provider. The redundancies come after at least five years of expansion, during which Nakheel took on staff for large salaries in order to resource its ambitious projects, which include the Palm island trilogy, The World and Waterfront.
It was a time when all Dubai developers scrambled to attract staff, with poaching being the norm and salaries being high. A junior level staff member, for example, could earn about Dh80,000 (US$21,780) a month with a company such as Nakheel, according to Simon Hobart, the managing director of the recruitment firm Millennium Solutions. Everyone was earning big money in the first six to eight months of last year, with the problems associated with that now being enormous, Mr Hobart said. Nakheel was paying people too much, it all went a bit mad. Some of these guys were only 24 or 25 years old. Today, they'd get a third of what they were on.
While there is no official figure on how many jobs have been lost in the property sector since the downturn hit, estimates suggest thousands have been made redundant across associated sectors, including construction. Thousands of redundancies have also been made in the financial sector. The job cuts could have a longer-term impact on the property market because of a dwindling local population. However, developers owned by the Dubai Government are working to streamline operations and, through integration and mergers, reduce further risks.
Dubai World said last month the property activities of its subsidiaries, Leisurecorp, Dubai Maritime City and Dubai Multi Commodities Centre, would now be managed by Nakheel, also owned by Dubai World. Emaar Properties is also in advanced merger talks with Dubai Properties, Sama Dubai and Tatweer, companies owned by Dubai Holding.
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