17 December 2008
The CEO of Al Shafar General Contracting (ASGC) has confirmed yesterday the firm is laying off between 500 and 1,000 staff.
"The rumours that 2,000 staff are being laid off is untrue," said Bishoy Azmy, CEO of ASGC. "The figure will stand between 500 and 1,000 and will take some time to come into effect. The fact is that some of our projects have been totally frozen and others have been suspended or delayed. Other clients have also had discussions with us about deferred payment options and delayed programmes to ensure that they have enough cash flow to pay us over the coming months. This means that at the moment, our monthly income is significantly reduced from our existing projects."
Seeing this scenario stretch across the next six months, ASGC has taken this measure to cut expenditures, said Azmy. "Many of the new projects that we were negotiating have been also been suspended. The developers need time to review and get a better clarity of the market. So as such, we have no choice."
He did not elaborate on the projects themselves citing non-disclosure verbal agreements with clients.
ASGC's current order book is valued at Dh6 billion involving contracts in Dubai and Abu Dhabi, against the Dh9bn in September, Azmy said.
People who are being suspended include staff on probation period. "They have joined us for new projects and are still in the probation period. Besides, when we conducted a critical appraisal of our existing staff, we also decided to lay off those who have shown dismal productivity records."
In September, Azmy had told Emirates Business that it was in the process of signing memorandums of understanding with two companies to look at synergies in business. "We did receive the documents from a development company but froze the tie-up since their own existence is in question," said Azmy. "The other proposition is an international contractor, who has diversified interests and we have already confirmed a tie-up." He was not willing to divulge any further details.
"We have projects in Dubai and Abu Dhabi and we are optimistic about the future but we have to be really careful to ensure that the company has no issues in the coming months," said Azmy.
"Everyone is re-examining their numbers, which were unrealistic the last year, be it for commodities, real estate and rents. "Those numbers were not sustainable. We are also correcting our numbers and asking our supply chain to revise their numbers the same way our clients are asking us. But the market is not collapsing around us."
The CEO of Al Shafar General Contracting (ASGC) has confirmed yesterday the firm is laying off between 500 and 1,000 staff.
"The rumours that 2,000 staff are being laid off is untrue," said Bishoy Azmy, CEO of ASGC. "The figure will stand between 500 and 1,000 and will take some time to come into effect. The fact is that some of our projects have been totally frozen and others have been suspended or delayed. Other clients have also had discussions with us about deferred payment options and delayed programmes to ensure that they have enough cash flow to pay us over the coming months. This means that at the moment, our monthly income is significantly reduced from our existing projects."
Seeing this scenario stretch across the next six months, ASGC has taken this measure to cut expenditures, said Azmy. "Many of the new projects that we were negotiating have been also been suspended. The developers need time to review and get a better clarity of the market. So as such, we have no choice."
He did not elaborate on the projects themselves citing non-disclosure verbal agreements with clients.
ASGC's current order book is valued at Dh6 billion involving contracts in Dubai and Abu Dhabi, against the Dh9bn in September, Azmy said.
People who are being suspended include staff on probation period. "They have joined us for new projects and are still in the probation period. Besides, when we conducted a critical appraisal of our existing staff, we also decided to lay off those who have shown dismal productivity records."
In September, Azmy had told Emirates Business that it was in the process of signing memorandums of understanding with two companies to look at synergies in business. "We did receive the documents from a development company but froze the tie-up since their own existence is in question," said Azmy. "The other proposition is an international contractor, who has diversified interests and we have already confirmed a tie-up." He was not willing to divulge any further details.
"We have projects in Dubai and Abu Dhabi and we are optimistic about the future but we have to be really careful to ensure that the company has no issues in the coming months," said Azmy.
"Everyone is re-examining their numbers, which were unrealistic the last year, be it for commodities, real estate and rents. "Those numbers were not sustainable. We are also correcting our numbers and asking our supply chain to revise their numbers the same way our clients are asking us. But the market is not collapsing around us."
By Sona Nambiar
© Emirates Business 24/7 2008
