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Dubai property giant sacks 500 as finance crisis bites
2008-11-30
DUBAI (AFP) - The Dubai property giant behind such grandiose projects as a one-kilometre tower and artifical palm-shaped islands said on Sunday it has fired 500 staff as the global economic crisis begins to bite in the oil-rich Gulf. Government-controlled developer Nakheel, one of the biggest employers in the booming desert city-state, also said it would be scaling back work on some of its projects. "Approximately 15 percent of the total workforce, which amounts to 500 employees, was made redundant," it said in a statement, describing the move as "a responsible action in light of the current global market conditions." It is the largest job cut in the wake of the global financial meltdown to be announced in United Arab Emirates and in Dubai, a city of skyscrapers, opulent hotels and malls which hosts hundreds of thousands of foreign residents including Westerners and Asian workers. "We have the responsibility to adjust our short term business plans to accommodate the current global environment," said an unnamed spokesperson quoted in the statement. "The redundancies are indeed regrettable, but a necessity dictated by operational requirements which are in turn dependent on demand," the spokesperson added. Earlier this month, Damac Group, owner of the region's largest private developer Damac Properties, said it cut 200 jobs or 2.5 percent of its workforce. Nakheel is developing several iconic projects in Dubai, including three palm-shaped man-made islands, only one of which is completed, and a cluster of islands in the shape of a map of the world. It also announced last month a jaw-dropping plan to build a one-kilometre-high (3,280 feet) tower which would overshadow the still unfinished Burj Dubai, already the tallest on earth. Nakheel also develops residential and commercial property, whose sales thrived after the sector was opened to foreign investors a few years ago. Last week, Nakheel jointly hosted a star-studded 20-million-dollar bash to celebrate the opening of the Atlantis Hotel on its Jumeirah Palm island, with a huge firework display. Top officials in Dubai insist the emirate's real estate sector -- a major engine of economic growth in recent years -- will weather the global crisis, but investors appear to have lost confidence in the market which was until recently a great magnet for investments. Mohammad Alabbar, head of Dubai's Advisory Council, which was formed to deal with the impact of the financial meltdown, hinted last week that Dubai's major developers will use their control over supply to curb an increasingly clear drop in property prices. "Our priority is to manage supply in the real estate market to ensure equilibrium," he said. Fears however loom over the future of Dubai's economy after a double-digit growth registered in the past few years, with concern rising over the emirate's accummulated foreign debt amid the global credit crunch. The emirate's bourse has been taking severe beating since the beginning of the financial meltdown, mainly due to a nosedive in real estate shares. Despite occasional surges, the Dubai Financial Market is now about 67 percent lower than its level at the the start of the year, while the market leader, Emaar property giant, has seen its shares drop to record lows. Foreigners number over 4.7 million, or over 84 percent of the UAE population, while Indians alone account for 42.5 percent of all expatriates, according to an unofficial study released this year. Expatriates from the Indian subcontinent and southeast Asia also make up around 75 percent of the workforce, the study said. There are also about 120,000 Britons representing the largest Western community in the UAE, with 100,000 living in Dubai alone.
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