Job cuts continue in embattled property sector

Property developer Dat Xanh Group laid off 1,384 people in the first quarter after letting go 3,191 in the previous one.

Its brokerage subsidiary, Dat Xanh Services, sacked 1,245 employees last quarter after letting go 3,000 in the final quarter of 2022.

The company expects more cuts in the remaining months of this year amid the continuing market slump.

Giant developer Novaland has been downsizing since last year and only had 1,362 employees on its payrolls at the end of March, a stark contrast to 2021 when it sought to hire 2,000 new workers.

It posted its first quarterly loss — of VND410 billion (US$17.45 million) — since listing its shares on the stock market in 2016, while revenues fell by 70% year-on-year.

Many brokerages partnering with Novaland have either cut 70-80% of their payroll or closed down as of May.

Other developers such as Danh Khoi, Hung Thinh, An Gia, Thu Duc House, Hoang Quan, Phat Dat, and LDG have also been laying off staff.

The marketing head of a Ho Chi Minh City brokerage said since March he has been doing multiple jobs, including as a secretary and customer service officer, after 80% of the staff were sacked.

The company has been owing salaries since the beginning of this year, which means people are likely quit in the coming months, he said.

“I have been working in the industry for 18 years, but never seen a layoff wave this big.”

Data from the Vietnam Association of Realtors shows that 40-50% of property transaction platforms shut down in the first quarter, and the number of brokers was 70% down since the beginning of 2022.

What property firms are struggling with most are the drying up of cash flows due to plunging sales and inability to repay debts.

Companies in the construction, architecture and design segments are also struggling, according to the association.

The number of companies in the property sector registering in the first quarter fell by 63% year-on-year, according to the General Statistics Office.

The number shutting down temporarily was up 60.7% at 1,816, while 341 closed for good, a 30.2% increase.

Tran Xuan Ngoc, CEO of developer Nam Long Group, said 2023 would be a challenging year for the sector with the difficulties being even more severe than during the 2013 crisis.

They would persist in 2024, he said.

“This is a severe and inevitable crisis. Property companies must restructure completely to survive.”

Nguyen Mac Hoai Nam, CEO of property consultancy Nam Phat, said the 2016-20 boom caused prices go out of control, and the challenges mushrooming now are a result of that.