Damac Holding confirmed it is cutting 200 jobs, or 2.5% of its workforce, as the global credit crisis begins to hit the Gulf's employment figures.
The jobs are being lost in Damac Properties, which has projects worth about $30 billion across the Middle East and North Africa. Those affected are in sales, marketing and recruitment.
'As a competitive business, the Damac Group has to ensure that it maintains its staffing levels according to market conditions both good and bad,' said Chief Executive Officer Peter Riddoch, adding that all companies would need to review staffing levels and recruitment needs due to the financial crisis.
The United Arab Emirates faces a slowdown in loan growth and real estate activity as it grapples with the fallout from the global financial crisis.
'As an international developer, we cannot expect to be unaffected by the downturn in countries like the UK,' Riddoch added.
Damac's announcement is the first public admission from a Dubai company that the Emirate's thriving real estate sector may have hit its peak.
'I think you will see a lot of sales staff and real estate agents dropping off because of the number of transactions beings reduced due to the financial crisis,' said Tim Rose, senior real estate fund manager at Emirates Investment Services.
'There is a decline in jobs. I think its cautiousness at this stage,' said Ahmad Waarie, general manager for Watson Wyatt in Dubai, a consultancy firm that provides human resources advice to about 750 Gulf companies.
'In the real estate sector, it is really obvious. There are lay-offs. Dubai is typically the fastest to react, so we are seeing more across Dubai; but it is also leading the way for the Gulf.'
The property sector is being affected in a number of ways. Lloyds TSB Middle East has stopped granting mortgages for apartments in the UAE and now requires a 50% down payment for villas due to 'exceptional market conditions'.
Emaar Dubai is giving customers more time to repay mortgages due to liquidity constraints at local banks which have exacerbated the problems of securing home finance.
Mohamed Alabbar, Emaar's chairman, said earlier this week that growth in the Emirate's real estate sector could slow to 9% due to the global downturn.
