Aldar Laing O'Rourke to cut 200 jobs

Aldar Laing O'Rourke, a joint venture between Abu Dhabi's largest property developer and a UK construction company, will lay off more than 200 employees in a move to "realign" the company to the changing economic environment. "In an environment like this, you have to be lean and agile," said Christopher Wilkinson, the company's managing director. "We've got plenty of work, but we don't think we are going to have the dramatic growth we were expecting."

The announcement is a sign that property firms in Abu Dhabi are starting to be affected by the global crisis. In Dubai, the impact has already hit home. Several signature projects have been shelved and more than 1,000 employees laid off. Mr Wilkinson said Aldar Laing O'Rourke employed about 1,900 people on its professional staff, including surveyors and engineers, from which the 200 jobs would be cut. The company also employed about 10,000 construction labourers, he said.

Aldar's first major joint venture was formed in June 2007 to spearhead construction of its 500-hectare Al Raha Beach project near the airport. Ousama Ghannoum, the marketing and communications director at Aldar, said the cuts did not mean any projects were slowing down. "Everything announced is happening and on schedule," he said. "This is a realignment." Mr Wilkinson said the economic environment required closer attention to costs and a more deliberate approach. "What we had before was a design process that enabled us to start work before it was fully designed, and catch up later," he said. "One of the things we are doing now is looking to give greater price certainty and getting more of the design done. We are not running at 150 miles per hour. We are running at 100 miles per hour."

While the slowdown in Abu Dhabi has been relatively mild, property companies in the region have hit hard times. The value of construction projects awarded in GCC countries fell 57 per cent to US$15.7 billion (Dh57.66bn) in the fourth quarter of last year, compared with the previous quarter, according to a report this week from Meed Projects. The UAE experienced a 40 per cent drop in projects in the fourth quarter, according to Meed.

Other construction companies that have reported job cuts include Al Shafar General Contracting, Al Masaood Bergum and Al Habtoor Leighton Group. The companies have also been cutting salaries and moving staff to other projects in the Gulf to lower costs. Imad al Jamal, the vice chairman of the UAE Contractors Association, said last month that asking staff to take pay cuts and lower housing allowances was becoming a common practice across the industry.

"They are either cutting down on manpower or reducing wages and other ongoing expenses in lieu of people staying longer with the company," Mr al Jamal said. "Hopefully, this trend will continue, as right now it's the best option for employees. In the last year or so, there was a big hunt for staff, and companies were paying exorbitant levels, so now salaries will come down to a more normal level."

Several Dubai property developers have also laid off staff. Nakheel cut 500 staff, or 15 per cent of its workforce in late November. Damac Properties, Sama Dubai and Emaar Properties have also laid off staff. @Email:[e-mail]