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Nakheel cuts 500 jobs as crisis bites

DUBAI - Dubai property giant Nakheel, developer of grand projects such as a one-kilometre tower and artificial palm-shaped islands, said on Sunday that it had cut 500 jobs or 15 per cent of its workforce as it scales back projects amid the global financial crisis and economic downturn.

“We have the responsibility to adjust our short-term business plans to accommodate the current global environment,” the company said in a statement.

It said the redundancies were “indeed regrettable”, but were necessary due to operational requirements which are in turn depend on demand.

“All the affected employees were provided a redundancy package, which includes outplacement support services to assist in this time of transition,” the statement said.

Earlier this month, Nakheel said it was witnessing a slowdown in the rate of real estate sales.

Nakheel joins a growing list of property firms cutting back on staffing to survive a decline in real estate prices. Dubai had seen a nearly fivefold surge in property prices since 2002 when it opened parts of the market to foreign investment and ownership.

According to an HSBC research report, Dubai suffered its first year-on-year fall in property prices last October.

The report said property prices in Dubai and Abu Dhabi fell in October for the first time since the emirates allowed foreigners to buy homes and could fall further this year.

Prices in Dubai fell 4 per cent from September while prices in Abu Dhabi were down 5 per cent, the report added.

Dubai-based Omniyat Properties also confirmed it has axed 69 jobs while Dubai’s largest private developer Damac said earlier this month it would lay off 200 employees.

Another Dubai-government owned developer Emaar Properties could make job cuts as it looks to weather the impact of the global financial crisis. The property-giant announced this month that it would pursue a recruitment strategy, which would be suited to the market conditions and in line with the best interests of the company in the long run.

The property sector is being affected in a number of ways. Lloyds TSB Middle East has stopped granting mortgages for apartments in the UAE and now requires a 50 per cent down payment for villas due to ‘exceptional market conditions’.

· abdulbasit@khaleejtimes.com