Dec 26, 2008

Business - India;Unitech lays off 10% staff

The country's second largest realty firm, Unitech, has reduced its workforce by about 10%, out of a total of 1,700 employees, as part of its cost-cutting measures on the back of a credit crunch faced by the company.

Besides, downsizing employees strength over the last 4-5 months, the company is also not filling up vacancies, which were left empty in the process of normal attrition.

"Our normal attrition is there. Naturally we are not looking for replacements... and we have let go trainees in over a period of 4-5 months," Unitech chairman Ramesh Chandra said.

The company's current rate of attrition is about 15-20% per annum, he added. Asked about the number of people that the company has fired, he said, "It is to the extent of 10% of total workforce and total is about 1,700 people". He, however, said the company has not cut salaries of its employees yet.

Besides, Unitech has also shifted some employees to its newly formed telecom venture from the real estate business. "Our telecom company's requirement is very large. We have transferred some people from Unitech to Unitech

Wireless (the telecom subsidiary)," Chandra said without giving details.

Unitech's shares have been slipping steadily since the last couple of months. All this happened in the midst of speculations that this realty major is planning to divest 26% to 40% to investors in order to raise funds. Shares of the company witnessed huge battering and plunged to near Rs 40 level from the 52-week high of Rs 546.80 on January 2 this year. Earlier this month, Ramesh Chandra had said it would mobilise up to Rs 2,500 crore through sale of some assets and equity to retire part of its Rs 8,000 crore debt by March 2009.

Reeling under slowdown and heavy credit crunch, the realty players have recently either cut jobs or slashed employees' salaries.

Earlier in this month, Parsvnath had cut salaries of its employees in top and middle level management by up to 20%, while Omaxe had fired 70 employees and also lowered the remuneration by 10%.

The country's largest realty firm DLF had also hinted at firing people if the demand of the sector would not improve.

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