maeswaran

DLF confirms layoffs, freezes projects </SPAN>
Press Trust of India
Tuesday, November 18, 2008 (New Delhi)
The liquidity squeeze-induced slump in demand has forced real estate leader DLF to fire some employees, put a number of hotel and housing projects on hold and yearn for 7 per cent home loan rates.

"We must have laid off some employees somewhere," DLF Chairman K P Singh told reporters on the sidelines of India Economic Summit, but did not give the number of jobs that were cut.

The company has also deferred some of its projects due to poor demand. "In hotels, residential and commercial everywhere... deferred because of lower demand and liquidity crisis," he said, again without sharing the specifics.

Singh also said high interest rates have taken a toll on demand. "There are no takers for housing sector... Ideally, the interest rate should be around 7 per cent."

Asked if the current prices of the realty projects are inflationary, Singh denied and said: "It cannot be inflationary as it has to be competitive. It also depends on supply and demand."

Because of demand going down, many projects have been closed down by many developers across the country, he added.

http://profit.ndtv.com/2008/11/18143116/DLF-confirms-layoffs-freezes.html

arin_12

Why dont Mr Singh try to reduce the Margin of the Profit...
Profit after Profit ... 50-70-100.... % of profit they have made before. And now they are crying when they need to reduce the margin to accommodate the present economy.
Laying Off is not the solution I believe .

wiseman

How arrogant can you get!!! Even after your "wealth" has declined over 90% due to your own greed and foolishness!

All these statements are so self-serving! For example, what does he mean by saying that we may have sacked some people somewhere? Does he think that he's become so big that he does not even have knowledge of how many people work for his company, how many projects are on at any time and what the state of each one is? Well, this shows that this industry is really only a cottage industry which has not professionalised yet. To give you an example, look at any of the Birla groups. Every day, without fail there is a standard one-page report from every factory and major office going to the head of the organisation, who has at his fingertips exactly how much was produced, how much dispatched and sold, financial data, etc, etc. He would then call any departmental / factory head and expected them to provide any details he asked for. Such was the level of competence, control and involvement. And all this was done without computers and over fax. And these people were handling business empires with far more companies, products, distribution channels and geographies. That is true professional business accumen!

Second, what does he mean the correct interest rate is 7%? So, interest rates must be fixed so that Realtors can push exorbitant prices onto sucker buyers and make unjustified profits? Its this very loose-money, low-interest rate policy that was at the root of this bubble. This is the kind of greed that comes back to bite you.

And what competition? All Realtors - taking advantage of gullible and greedy investors who chased dreams of making it too big too quickly by speculating with Realty - formed cartels and fixed prices by other means. So, what competition is he talking about?

He is right about one thing, inadvertantly, though. Due to all-round greed and overindulgence, there is now an oversupply of property (even commercial) that is umlikely to be taken up anytime soon at the high prices of last year.

The builders (an others too), have not yet adjusted to the new realities that are shaping the world today. Maybe they do not have information to help them become realistic. Maybe they cannot ber to change. Either way, reality will be forced upon us.

This time he - and other builders - will find out the hard way that they must build businesses slow and steady and in such a way that the economy is capable of sustaining a non-volatile way of growing long-term. Otherwise we will face such shocks increasingly in the future.

We shall see ... Time will tell!

cheers

Kimmig

Well said Wiseman .. builders have lost a sense of reality .. builder lobby, banks and politicians have colluded to bring upon this phenomenon which will ultimately end up in a farcas in India much worse than the subprime crisis the US is seeing currently