UK firm Atkins sheds 100 jobs as construction hit by tightening Middle East budgets

Construction companies are laying off staff as experts warn that the low cost of oil will continue to bite into budgets this year.

Last week the British engineering company Atkins became the latest construction-related firm to cut jobs in the region as it made about 100 of its 2,000 Middle East-based staff redundant because of worsening economic conditions.

Atkins said that the job losses from its property and infrastructure teams were the result of a continued slowdown in both the UAE real estate market and infrastructure sectors.

“We have been continually assessing the regional market carefully over the last few months and have seen an ongoing slowdown in awards of new projects across the property and infrastructure sectors,” an Atkins spokesman said.

“Unfortunately, due to these worsening economic conditions, in recent weeks we have therefore taken the difficult decision to make almost 100 people redundant in our Middle East property and infrastructure teams.”

Much of Atkins’ business in the region comes from railway contracts and other large-scale infrastructure work, as well as large property projects.

The company has been heavily involved in designing the initial stages of Etihad Rail in the UAE, while in Qatar it is currently working on designs for Doha Metro Red Line South and in Saudi Arabia it is working on designs for the Riyadh Metro. In Dubai the company is working on major real estate projects such as Emaar’s Dubai Opera District.

Oil prices have fallen from more than $110 per barrel eight months ago to about $30, hitting state budgets and spending.

On Friday, the ratings agency Standard & Poor’s revised its predictions for the emirate’s balance sheet, estimating that Abu Dhabi’s budget would run at a deficit of about 5 per cent of the emirate’s GDP for the next three years.

In January the UAE rail operator Etihad Rail announced a “restructuring initiative” hought to have included slashing almost a third of its workforce as the government comes under pressure to reign in spending.

Other major infrastructure projects in the emirate are likely to come under pressure in the coming months as state budgets are squeezed further.

Local recruitment consultants reported that Atkins was among a flurry of engineering and construction companies currently making redundancies after reduced government budgets.

“Over the past few months the number of phone calls we have been receiving from construction professionals who have been laid off has definitely increased,” said Ben Waddilove, an international director at the recruitment consultant Macdonald & Co.

“At the same time we’ve also seen a drop in the number of instructions we are receiving from clients looking to recruit construction professionals, with a drop of probably around 10 per cent. It seems to be mostly firms doing work for or with links to the Abu Dhabi government,” he added.

Low oil prices are also having a dampening effect on property markets across the UAE with house prices in Dubai down by an average of 11 per cent in 2015, according to the property data company Reidin and remaining flat in Abu Dhabi.

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