Property firms cut 600 jobs

Abu Dhabi // Property companies are entering a period of aggressive cost cutting and staff layoffs as the credit crisis slows the economy, with nearly 600 property sector employees losing their jobs in the past few weeks. Those being laid off are not limited to junior ranks - middle and senior managers are also being dismissed as companies face up to slowing sales with major management reshuffles. "This time last year, everyone was in a rush and layer upon layer of management was being added to these companies," said Charles Willson, an executive recruiter working in the UAE. "Now a lot of senior management from the developers are calling about new jobs. There are cuts, but also there are a lot of management changes underway." Tameer Holding, a Dubai-based property developer, is the latest company to cut costs, and has told more than half its staff they would be laid off, according to a source close to the company. A total of 180 employees out of a workforce of 350 were notified that they would lose their jobs by Dec 31, the source said yesterday. Tameer is majority owned by the Al Rajhi Investment Group in Saudi Arabia. It has announced more than 30 projects in the region, including buildings on Reem Island in Abu Dhabi and towers in Dubai Marina and Business Bay in Dubai. On Monday, Omniyat Holdings in Dubai cut 69 employees from its workforce of 350, it said. Damac Properties has cut 200 jobs, or about 2.5 per cent of its 8,000-strong workforce, officials said. Damac, Dubai's largest private property developer, has also frozen plans for projects in India, Pakistan and North Africa because of the global economic meltdown. The company will postpone the launch of all new projects until market conditions improve. The founder and chairman of Damac, Hussain Sajwani, said it was committed to delivering projects already launched in eight markets including Dubai, Abu Dhabi, Qatar, Bahrain, Jordan, Iraq, Egypt and Saudi Arabia. "We have stopped growing outside of the eight markets where we have already launched projects," he said, adding that he would review proposed projects in India, Pakistan, Algeria and Morocco in 2010. Mr Sajwani said the company had almost Dh700 million (US$190m) worth of instalments in escrow accounts to fund the construction of its projects in Dubai, and the company's total borrowing in the emirate stood at Dh420m. He said that there had been "zero borrowing" from banks for the construction of projects beyond Dubai, which were being funded by sales. "The majority of our customers are paying from their sources - yes, a few are having challenges, which we are dealing with." Mr Sajwani said more jobs would be lost if economic conditions worsened. "We had to rationalise costs and let people go. We'd been growing in sales by 100 per cent a year, but it is not the same now. If the market gets worse, we will have to let more people go, but this is just business." He added that next year would be a challenging one for the company, although he expected the Dubai property market to be stronger by 2010. "This correction will be healthy. With a lot of developers leaving and there being less projects announced in 2009, it will be stronger in 2010 as demand will still be there - there's still a shortage of residential and office units in Dubai." Emaar Properties, the largest developer in the country, has also begun cutting back on staff. According to one former and one current executive, more than 100 people have been laid off as of late last week. Mohammed Ali Alabbar, the chairman of the group, declined to confirm the number of employees that had been cut, but acknowledged the process was under way. "I don't have a number to share with you, but there might be some," he said on Monday. "We have to protect shareholder value." The company declined to make a spokesman available yesterday. Emaar said earlier this month that it would be "revisiting" its recruitment strategy because of a changed economic environment. "Emaar will pursue a recruitment strategy which will be suited to the market conditions and in line with the best interests of the company in the long term," the statement said. Meanwhile, Dubai authorities are looking at legal options to extend the grace period for expatriate employees who lose their jobs before they have to leave the country, according to a Zawya Dow Jones report. Under present laws, Dubai, with its workforce largely made up of expatriates, allows foreign workers to stay one month before they have to leave the country. * with agencies bhope@thenational.ae agiuffrida@thenational.ae