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| by Jamie Stewart | Nov 11, 2008 |
Developers and contractors have slashed jobs across Dubai as the global financial crisis hits the region.
Damac Group has cut 200 jobs due to the slowdown in Dubai’s real estate market, the company said.
The cuts reflect the awareness of developers and contractors that the economic meltdown in the United States and Europe has frightened investors into putting the brakes on providing funds for large projects.
The firm said that redundancies were “focused in those areas that have been directly affected by the contracting market, including sales and marketing, recruitment and back office support functions.”
Damac CEO Peter Riddoch said, “We regret that we have to lose colleagues but we believe that taking an early decision was the right thing to do.
“This continuing global slowdown will inevitably lead all companies to review their staffing levels and recruitment requirements.”
Simplex Infrastructure country director Ani Ray told Construction Week that his firm had relocated staff away from Dubai to Oman and Qatar “to avoid having to make them redundant.”
“The banks are the problem,” Ray said. “They are not even dispersing the funds for projects that have already been approved so the projects are stopping.”
Contractor’s Association vice-chairman Imad Al Jamal told Construction Week that Emaar and fellow master-developer Nakheel have cancelled projects.
“Some parts of Nakheel’s projects have been cancelled or shelved for a year,” Al Jamal said.
“A project director in one of Nakheel’s projects was in design with the consultant when the instruction came through to stop everything until October next year – a year’s freeze.”
Al Jamal said he was not at liberty to name specific projects.
“Transparency is much in demand here,” he added. “It is all going on behind closed doors.”
A top contractor, who spoke on the condition he not be identified, said that Nakheel had been forced to cut 150 jobs from across its Dubai operations.
Nakheel officials denied the claims. A spokesperson said the firm had not made any of its staff redundant, nor had it frozen recruitment.
But the spokesman added: “Given the current global economic climate we are naturally being prudent and looking at the best quality and quantity of resourcing across the entire company. This is a responsible approach in line with Nakheel’s business model.”
A top Emaar executive, who also asked not to be identified, said the master-developer had been forced to cut “a substantial number of its Dubai-based workforce,” quoting 80 at present, “with more to come.”
Emaar officials told CW that it had “no comment on this matter at present,” and refused to comment on any further potential job losses.
The situation could worsen over the coming weeks, industry insiders have warned.
“In December there will be more blood on the streets,” Ani Ray said.
“The worst is yet to come for the market,” Al Jamal said. “We have just seen the first repercussions of what has happened in the West. In the next three to six months we are going to see worse than that.”
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