Nakheel has merged the project teams working on its Waterfront and Palm Jebel Ali developments in a further sign that the financial crisis is taking its toll on the property sector. The move was part of a restructuring process being carried out across the entire company and would not result in any job cuts, the property developer said.
However, a person familiar with both projects said further consolidation would lead to a second wave of redundancies as the company tried to further cut costs. The source did not say when the redundancies would happen or how many jobs would be lost. "We're going to be restructuring, so will have to make a few redundancies," the source said. Nakheel described combining the project teams under one management structure as "in keeping with our business objective of matching supply and demand in the most effective way".
The company cut 15 per cent of its workforce, or 500 staff, last month and industry analysts predict that a second round is "inevitable". Nakheel announced recently that it was stalling work on major projects including the Trump International Tower and Hotel, Frond N villas and Gateway Towers - all on Palm Jumeirah - and The Universe, as it grappled with a slowdown in the property market and funding restrictions.
Work on Palm Deira and parts of Waterfront has also been slowed, while infrastructure contracts which had been expected to be awarded on Palm Jebel Ali this year may be delayed. The company confirmed last week that further construction work on Tall Tower, a building that will be the centrepiece of the Nakheel Harbour and Tower Development and is expected to rise more than 1km, had been delayed for one year.
If the Tall Tower went ahead as originally planned, Nakheel would need Dh30 billion (US$8.16bn) to finance its construction and at least 10 years to build it. Thousands of people working across the property and finance sectors have lost their jobs in recent months. Companies that have confirmed redundancies in the property sector include Damac Properties, Omniyat Properties and Tameer Holding, while those affiliated with the sector, such as the construction firm Al Shafar General Contracting and WS Atkins, a design and consultancy firm, have also confirmed job cuts.
"It is inevitable that developers with a large workforce who have made one wave of redundancies will make a second one as they restructure their companies," said a Dubai-based recruitment consultant. Istithmar World, the investment arm of the government-owned Dubai World, confirmed today that it had made 13 people redundant. The company said the move was made "in light of current external market conditions and our strategy to align resources in line with business requirements for 2009". agiuffrida@thenational.ae
