Almost Fifth Of UAE Jobs Cut In 12 Mos Amid Downturn
USA, 8 Dec 2009
DUBAI - Almost a fifth of workers in the United Arab Emirates lost their jobs this year as construction firms hit by the global financial crisis cut back amid a near 50% fall in property prices, a survey showed Tuesday.
A total of 16% of job cuts were made over the 12-month period to August, online recruitment firm Gulf Talent said in its annual survey of labor market trends in the Gulf region.
Of these, 15% of redundancies were made in the real estate sector, the survey said, with 13% of senior executives being laid off and 13% of Western expatriates.
Thousands of foreigners were fired in the emirate's construction, real-estate and financial services sectors after the global economic downturn hit Dubai late last year.
The Gulf Talent figures are the first indication of the extent of the layoffs as official figures are scarce.
The survey of 24,000 professionals in the six-member Gulf Cooperation Council region was conducted in September and October before news of the proposed debt restructuring by Dubai World last month, which analysts fear could lead to a wave of redundancies at government-owned companies forced to restructure.
Out of those companies questioned, 15% said they plan to make further job cuts, while just over half expected to increase headcount next year.
Government-owned companies, such as Nakheel which is at the center of Dubai's economic concerns, are the emirate's biggest employers, accounting for the majority of expatriate jobs.
Last month, Deyaar Development PJSC (DEYAAR.DFM), Dubai's second-largest developer, laid off around 60 people, or 20% of its workforce. Dubai World has cut its global workforce by 15% to just under 70,000, with the deepest cuts in the U.A.E. Last November, Nakheel cut 500 jobs, or 15% of its workforce.
A further reduction of the emirate's working foreign population could weigh on an economy already hit by a 50% fall in real-estate prices over the last year. Oil sales account for less than 5% of the sheikdom's economy, with the majority of its income coming from service industries, retail, trade and tourism.
Of those expatriate workers who were laid off, most returned home, the survey said, while others relocated to neighboring Abu Dhabi or other Gulf countries such as Qatar and Saudi Arabia. Gulf Talent said among expatriates living in Dubai, the percentage who work in Abu Dhabi has tripled over the last year to 3% from 1%.
Amid the downturn, the wages of those still in employment are also being impacted, Gulf Talent said. Salary increases in the U.A.E. fell to 5.5% this year from 13.6% last year, largely due to the country's heavy exposure to the real-estate sector, the survey said.