Developers Facing Staff Reductions

The country's real estate developers have started slashing staff as funding for their construction projects has dried up, industry sources and headhunters said on Thursday.

Personnel agencies said that in several cases, up to half of company staff was shown the door, though the developers themselves said sackings had not yet reached that scale.

"We are falling and falling, and we can't see the bottom," the vice president of one Moscow developer said. "So it's hard to get a fix on the situation."

PIK, one of Russia's largest mass market housing developers, which also operates a mortgage business and manufactures construction panels, is cutting staff by 15 percent to 35 percent, depending on the region and business line, spokeswoman Natalya Konovalova said.

Sistema-Hals, the real estate unit of billionaire Vladimir Yevtushenkov's Sistema services conglomerate, has already slashed staff, a source at a large local headhunter said.

"In the middle of October, the company already had the first wave of sackings, mainly of mid- and low-ranking personnel in all departments. About half the employees left the company," the source said.

Sistema-Hals declined official comment, but two sources close to the management of the company confirmed that it had enforced a significant staff cut.

"For now, it isn't 50 percent," one of the sources said.

AFI Development, controlled by billionaire diamond dealer Lev Leviev's Africa-Israel Investments, announced on Wednesday that it would halt construction on most of its portfolio to focus on a handful of Moscow projects that are already near completion.

"Our staff was a bit inflated," AFI press secretary Natalia Ivanova said, adding that it was unclear how many staff would be cut.

RTM Group said last week that it could not maintain its staff levels due to its reduced construction schedule and short-term debt obligations.