Wednesday, November 05, 2008

Dubai Developers and brokers feel bite of credit crisis

Dubai Mall opens as the largest shopping mall in the world amid world turmoil

Developers and agents are reducing staff numbers for the first time in four years.

Developers and brokers in Dubai are trimming staff and freezing recruitment as they face a slowdown in sales after years of breakneck hiring.

The increasingly cautious approach, taken by both big and small companies, appears to be gaining momentum even though many companies say they expect the slowdown to be short-lived.
“The continuing global slowdown will inevitably lead companies to review their staffing levels and recruitment requirements,” said Peter Riddoch, the chief executive of Damac Properties.
“Damac Properties will continue to review its own position in line with the market and aim to ensure that it right-sizes and maintains its staffing levels accordingly.’’

Mr Riddoch declined to detail Damac’s staffing. The move follows a decision by the firm in August to close four of its sales offices in Europe – three in the UK and one in Ireland.
According to one sales agent, many of the sales staff of 380 could lose their jobs as sales slow markedly.
“I’m waiting to hear what’s happening, some staff have been let go already,” the agent said. “When sales aren’t being made, letting people go is the right thing to do.”
Better Homes, a property broker, is also planning to lay off some of its 700 staff.

“There are layoffs but not in large numbers,” said Zara Aziz, the head of communications. Other property firms are taking a more cautious approach to hiring and are carefully assessing the performance of their workforce.

“We’re evaluating our recruitment situation. Many people are under probation and we’re appraising their performance,” said Walid Abdel Latif, the director of sales and marketing at Define Properties. Mr Latif said the company was mainly eyeing the performance of its sales staff, which account for more than 50 per cent of its workforce.

“Still, we are very confident about the market in the long term, and are planning to expand our construction division to ensure we fulfil our commitments,” he said.
Larger developers also appear to be reviewing their employment levels.

“Everyone is worried about their job. Property companies are starting to look at their numbers again,” said a person with close ties to Emaar, one of Dubai’s largest developers.

“They’re definitely letting people go, but we don’t know how many yet or when it will be announced,” the person said. Sales and marketing staff are expected to be among those whose ranks are trimmed, although other areas will also be affected, the person added.
Emaar declined to comment.

Nakheel, another of Dubai’s biggest developers, is reviewing its hiring strategy, although it says it is not laying off workers.

“We have grown from 1,800 people just 12 months ago to a company of more than 3,500 people today,” the company said.

“In line with this phenomenal rate of expansion, we are naturally being as prudent as ever and looking at the best-quality resourcing across the entire company.”

Dubai’s major developers increased staff numbers by about 100 per cent year-on-year since 2004, when a slew of projects started to come on stream, according to estimates from recruitment experts.

“In this kind of instance, companies tend to use a slowdown as an excuse to offload underperforming people,” said Matthew Taylor, an international director at MacDonald and Company, a property recruitment firm.
“But I don’t think the slowdown in hiring will last and believe it will pick up from January. Companies will still need people to deliver their projects. We’re also very busy as the rest of the GCC is still booming.”

Meanwhile, the country’s construction companies are making the most of the global downturn to source key employees who up until a few months ago had been scarce.

“We will use the global recession as an opportunity to source new talent,” said James Wood, the general manager at Al Fara’a General Contracting.
“We used to pay a high salary for average people, but the current trend has opened up a large supply of high-class talent.”
From The National (Abu Dhabi)

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