With the real estate sector facing a slowdown, small-time real estate developers are laying off employees to tide over the funds crunch. According to rough estimates, some 35-40% employees have been given pink slips.
Though larger companies like DLF and Unitech have not been affected by the clampdown on external commercial borrowings (ECB) as well as the hike in home loan rates since they have large number of projects on board, smaller developers are reeling under pressure. The employee strength of most small-time developers is not above 50-80, and the financial crunch is making most of them lay-off at least 20-25 people as on date. In fact, most small developers are not getting the funds to launch new projects and even the already-announced projects are in a limbo. The main reason for this is the reluctance on the part of banks and financial institutions to lend money for real estate projects. The repo rate hike and the finance minister hinting at more measures to burst the real estate bubble is only worsening the scenario. Says MS Aggarwal, managing director, MSX Developers Pvt Ltd, ?When the market went into a boom, many developers announced a number of projects and hired people to market and execute them. But, today the scenario has changed and small-time developers are finding it difficult to finish their projects on time, forget launching new ones. With the result that they no longer require those many people on board and hence have started laying them off.? In such a situation, developers are also finding it difficult to retain talent. ?Our trained manpower is being hijacked by bigger players in the market. Since the big developers have the money to spare and are also not bereft of projects, they are now luring talent from smaller and mid-time developers,? says Varun Pawha, director, Pawa Builders.
