More Job Cuts and Canceled Projects in Dubai

Today, Limitless, owned by Dubai World has announced more cuts in it’s workforce and another delayed project in Dubai.

Dubai-based developer Limitless said today that it had cut 7% of its workforce and delayed its $61 billion Arabian Canal project thanks to the real estate collapse in the UAE.

“We have made a difficult but necessary decision in response to current market conditions … unfortunately, this means taking the painful step of laying off a small proportion of staff,” said Limitless in a statement issued today.

This follows on from thousands of other job losses in Dubai’s once-booming real estate sector, as property prices fall and developers delay and/or cancel projects.

Nakheel, another child of Dubai World cut 500 jobs in November, while Istithmar World , the company’s investment division, reduced its workforce by 10% in January.

Dubai’s finance department head said on March 24 that Dubai World would be one of the targets of an emergency $10 billion rescue plan launched in February.

Dubai World sheds more Jobs

Limitless said it had also delayed a contract on its Arabian Canal project. “Our invitation for bids on phase 2 of the excavation received a healthy response from local and international firms. We have contacted them all to advise them of the postponement of the award of this contract,” it said, although I gather work is still going ahead on the first phase.

In a stunning display of faith, the very same day more job cuts were announced, Dubai’s ruler, who has just been bailed out to the tune of $10 billion by Abu Dhabi and is facing the almost impossible task of restructuring massive debts this year gave a speech to a group of UAE businessmen in Russia and stated that no one should worry because God is looking out for them and the UAE will not be as hard hit as the rest of the world by the financial crisis.

“Our fathers and grandfathers lived in hard times with poor resources, food and other requirements of decent life. Still they left us heritage and history, which we take pride in as a leadership and people, and thank God we are good and our economy is good, and we should not worry or be pessimistic. We should rather be very optimistic. I always say ‘be optimistic and you will be prosperous’.”

In the meantime, luxury property in Dubai has fallen around 70% in price since it’s peak last year and is continuing to decline in value; the Dubai government is considering new laws to prevent indebted ex-pats from leaving the country; and Deyaar development is suffering from a 60% default rate on off-plan properties.