Omniyat adds fuel to retrenchment fire

Thursday, Nov 20, 2008

Gulf News

Dubai: Developer Omniyat has joined the growing number of companies scaling down their human resources, with the retrenchment of nearly 100 employees over cash flow problems.

Recent reports put the number at 60, although a source told Gulf News yesterday that the number of those sacked was close to 100.

However, Omniyat said the number was less than 100.

"An official spokesperson from Omniyat rejects these claims ... the number is completely incorrect," Omniyat said in an email response to Gulf News.

The liquidity crunch has begun to bite into Dubai's overhyped real estate market, where property prices and salaries of employees were highly inflated, analysts say.

"This is a natural and healthy correction," an analyst, requesting anonymity, said. "The only way to continue business is by cutting costs and sustaining businesses."

Caution

Omniyat has already postponed the launch of several projects until "conditions can cope with them", said Alex Andar-akis, the company's managing director of sales and marketing.

While it is the property sector that has been most impacted, it is, in reality, the people who work for it who have been hit the hardest.

Earlier, Damac had kicked off the trend by sacking 200 staff members, while Better Homes also cut down its human resources as the economic crisis filtered through to all sectors.

Ironically, the real estate industry in Dubai, which has been growing at a worrying rate, now seems to have been stopped in its tracks.

Developers, who, until last month, were ignoring global economic fears and continued to launch dazzling projects at sky-high prices, are now, perhaps, learning the hard way.

Buying and selling activities have slowed down in recent weeks, leaving developers unable to sell units.

Some have been forced to abandon their projects all together.