Layoffs Mount In Dubai Property Sector

DUBAI (Dow Jones)--Layoffs are mounting in this city-state's property sector, with one of Dubai's most ambitious government-owned developers announcing big job cuts Sunday.
Dubai-based developer NakheelNakheel said Sunday it shed 500 jobs, or 15% of its workforce. In a statement Sunday, the company said it was scaling back work on its projects "to accommodate the current easing market conditions."

"We have the responsibility to adjust our short-term business plans to accommodate the current global environment," the statement said. The company didn't specify where the job cuts were being made or which projects were being scaled back. The company previously said it was looking at slowing work on one of three palm-tree shaped island developments it is building.
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Also on Sunday, Morgan Stanley (MS)Morgan Stanley (MS) said it had let go of 10-15 staff from its roughly 110-person Dubai office. The banking layoffs come just months after several big Western banks started beefing up their staff here. International banks had hoped to mine the region for deals and fees that have become hard to come by almost everywhere else in the world.

And last month, another big developer Damac GroupDamac Group, said it was shedding 200 staff, or 2.5% of its workforce.

A layoff in Dubai can be much more problematic than in other places. The United Arab Emirates has a population of 4.4 million, but less than 20% are estimated to be citizens. Expatriates do most of the work - filling everything from low-paid construction jobs to midlevel and senior management positions. Expatriates are required to find new jobs within a month or leave the country.

Dubai authorities are looking at options to extend the grace period for expatriate employees that lose their jobs before they're forced to leave, a senior government official told Zawya Dow Jones last week.

While the oil-rich Persian Gulf once appeared protected from the financial turmoil swirling around it, a number of factors have combined to cause real pain for governments and companies in the region. Falling oil prices mean lower revenues to pump back into the economy in the form of big infrastructure projects. Banks have been cut off from foreign borrowing lines amid a global credit seize-up, making lending difficult. Meanwhile, in Dubai, the once-red-hot property market is weakening.

Analysts at HSBC Holdings PLC (HBC) said prices had fallen 4% in October from September, the first drop in the six years the market has been open to foreigners.
(END) Dow Jones Newswires