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Sun 6 Jun 2010 10:39 AM

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Laing O’Rourke to close Mideast division

Construction firm cutting its global workforce from 35,753 to around 20,000.

Laing O’Rourke to close Mideast division
ACHIEVEMENT: British construction firm Laing O’Rourke, which worked on the Atlantis Hotel in Dubai, is shutting its Mideast division.

British construction firm Laing O’Rourke, which worked on the Atlantis Hotel in Dubai, is to shut its Middle East operations, it was reported at the weekend.

A source within Laing O’Rourke told the Building.co.uk trade website that Laing O’Rourke was cutting its global workforce from 35,753 to around 20,000.

The firm is the UK’s third largest contractor and began its operations in the Middle East in 2006.

“It’s been a nightmare for my family and hundreds of former colleagues who are out of work. The firm can’t employ more than 4,500 workers and 900 professional staff in the Middle East now, which is down from about 16,000 and 5,000 during the boom - a fall of about three-quarters,” the source told the website.

The closure also affects the firm’s south Asian operations and follows the end of a joint venture in India with Indian firm DLF.

Last year, Aldar Laing O’Rourke, a joint venture between the Abu Dhabi property developer and the UK construction company, told Arabian Business it was cutting 320 jobs.

However, it was confirmed that Laing O’Rourke will maintain its relationship with Aldar, with whom it is working on the AED54bn ($14.7bn) Al Raha beach project.

The firm’s turnover in the region in 2009 doubled to £829m ($225m), the report added.

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Misha 10 years ago

This retreat is a sad sign of the times, but I applaud the company for telling it as it is. It is the responsible thing to do. This stands in stark comparison to all those who like to have us believe all will be well.

Blackberry 10 years ago

After everything they did to Aldar projects, this is the least they deserve. OUT!

A R S Wilkinson 10 years ago

Not sure about the JV with ALDAR continuing though! Check out the disabled website. Can't say I am suprised by this announcement though but it's not just a sign of the time;LOR has sufferred over the last few years in UAE due to badly managed contracts.

Simon 10 years ago

When you look at the plite of Arabtec and then compound it with the news from LOR it starts to tell a very real story. When the biggest companies in an industry start down this sorry and unfortunate route, it leaves little to the imagination what is 'really' happening for the rest who keep such things to themselves. The construction industry is reeling in agony from over leveraging against 'cast iron' contracts and having those contracts undone in an economic climate they never contemplated. The knock on effects will be huge...contractors, sub-contractors etc, etc. Couple that to the Real Estate market, two of the biggest employers, sub-employers in the UAE and things look as though they will be just as hard for sometime to come. Banks won't lend because they can't lend...they don't have the liquidity or they are holding back reserves for bad loan writedowns. It is pretty grim...and will be for sometime. Batten down the hatches, save what you can and buy only what you can afford for cash. Keep away from credit until you have mastered the new economic environment and don't live for tomorrow thinking the good times are just around the corner...they're not. Articles like this just prove the point. I hope I haven't gone on too much but these signs need to be heeded by all.

twistedtory 10 years ago

it's sad that innocent people will lose their jobs, but LOR played hardball and insisted that their contracts be fulfilled and paid out fully. they refused to accept the realities of a new global economic order and be realistic, renegotiating terms. had they been willing to do so, they still would have had some downsizing, but it would not have been this dramatic. that greed will now hurt good people who counted on LOR. shame on greedy management!

ahmed 10 years ago

No business can sustain itself in the long run with out proper payments from the client.Being stern on choosing the right client, who can guarantee payments is one of the right steps LOR has taken.Being a company who is already owed huge amounts of money from the clients,its quite natural . LOR is a strong company with superb systems in place , excellent allround capabilities, run by a group of very dedicated individuals.

Muhammed Azeem 10 years ago

If LOR would have been in a position to keep a steady and healthy relationship with ALDAR...the dreams of employees,consultants and a lot of associated employees and organisations would have been materialised..I expected a mature management from LOR.It's not just giving employment for some people, not just building some townships...it's not what we expect from a construction company having a strong foundation..Alas! it's too late to lament.GOOD LUCK my friends, who lost their jobs...GOD BLESS YOU.

The Peregrine 10 years ago

The news article is a little disjointed...facts are not correct. Have seen some earlier comments. Few things to note - you cant clap with one hand. You need the other. JV is based on mutual trust and respect...and the same holds true for both parties engaged. UAE is a place for migratory workforce - who come to work on projects. All projects have deadlines...and the company has met the deadlines. If you thought this is your new found home - think again and you will have all your answers. Redundancies are harsh...but its better faced upfront rather than live in false hopes...

Paul King 10 years ago

Obviously this is bad news for all the fixers that want you to think that wonderland is still on schedule. My guess is that this is very positive news, because the faster the big decisions are taken and the fallout to hurt deeply, the faster everyone will see the new economic landscape clearly. We are in the final chapter of a 25 year credit expansion. We need to allow zombie governments, banks & companies to collapse instead of continuing to bail them out with more credit. Too many, spent money they didn't have, on things they didn't need.

Ken F 10 years ago

At least the sun still shines