Layoffs at real estate firms on the rise

Hoang, a legal officer at a real estate company in Ho Chi Minh City, said four out of five people in his office have left the firm, so he is doing all the work relating to legal affairs, while his salary has been halved.

The company, located in District 3, has been cutting staff since late last year, and the situation has worsened in the first two months of this year when more employees were laid off, and many others took the initiative to quit because their incomes were cut sharply.

Hoang said all departments of the company have reduced their staff by 50-70% because investment and sales have been stagnant.

“Most of staff in the after-sales department has been laid off or have quit,” Hoang said. Many real estate firms also owe salaries to their staff for the first two months of the year, so employees want to leave the companies.

Kha, a sales officer in the marketing department of a real estate company which is developing a project in Thu Duc City, said that earlier this month he submitted his resignation letter and is no longer a staff member of the company.

His company’s marketing department used to have more than a dozen workers, but currently has only one department head, who is now responsible for legal and external affairs, and after-sales departments.

“In December 2022, the company laid off some 50% of its employees. By early March, the number of people leaving the company had jumped to over 60%,” Kha said.

The chairman of a listed real estate firm said that when it announced its layoffs and the amount of salaries owed to workers at the end of last December, its staff decreased by 50%.

In the first two months of this year, hundreds of employees were laid off or left the company.

“Many difficulties are looming in the first six months of this year, so the number of employees leaving our company may continue to increase from March,” the chairman said.

According to the fourth quarter financial report of property developer Dat Xanh Group, the company has laid off 3,191 employees.

The Bao Viet Securities Co. said that this year real estate firms will be forced to restructure to survive in difficult times.

The 2023-2024 period will be extremely challenging for the real estate market, requiring businesses to restructure loans and product portfolios while waiting for legal bottlenecks faced by the market to be removed, the securities firm said.

A survey by VnExpress shows that more than 10 real estate companies operating in HCMC and the southern provinces at the end of December last year laid off, or lost, thousands of employees in the last two quarters of 2022, mostly staff working in sales, after-sales, marketing and legal departments.

Real estate brokerages and developers that have their own brokerage departments have laid off at least 50% of their employees.

Nguyen Loc Hanh, CEO of Asia Gem Real Estate Investment, predicted that the wave of staff cuts in the sectorwill increase sharply in the next six months.

Hanh predicted that many people in the real estate sector will switch jobs in the second and third quarters of this year.