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Dec 2, 2008

Dubai Layoff Grow as Developer Sheds 500

Layoffs are mounting in this city-state's property sector, with one of Dubai's most ambitious government-owned developers unveiling big job cuts Sunday.

Dubai-based developer Nakheel said it shed 500 jobs, or 15% of its work force, adding that it is scaling back work on projects.

"We have the responsibility to adjust our short-term business plans to accommodate the current global environment," the statement said. The company didn't specify where the job cuts were being made or which projects were being scaled back.

Also Sunday, Morgan Stanley said it had let go of 10 to 15 staff from its roughly 110-person Dubai office. The banking layoffs come just months after several big Western banks began beefing up their staff here.

A layoff in Dubai can be more problematic than in other places. The United Arab Emirates has a population of 4.4 million, but less than 20% are estimated to be citizens. Expatriates do most of the work, filling everything from low-paid construction jobs to midlevel and senior management positions. Expatriates are required to find new jobs within a month or leave the country.

Dubai authorities are looking at options to extend the grace period for expatriate employees who lose their jobs before they are forced to leave, a government official told Zawya Dow Jones.

While the Persian Gulf once appeared protected from the financial turmoil swirling around it, several factors have combined to cause pain for governments and companies in the region. Falling oil prices mean lower revenues to pump back into the economy in the form of big infrastructure projects. Banks have been cut off from foreign borrowing lines, making lending difficult.

Meanwhile, in Dubai, the once-red-hot property market is weakening.

Source : WSJ
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