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The country’s largest real estate developer, DLF, had reduced its employee base 30 per cent to 2,600 at March-end from a year before as part of outsourcing its project execution and facility management. It had about 3,700 employees at the end of 2011-12, according to the company’s latest annual report.
"It (DLF) has successfully outsourced the project execution/management and facility management. In addition, outsourcing of some of the accounting functions is also under way. Accordingly, as on March 31, ‘on rolls’ talent pool comprises about 2,600 employees," DLF said in the annual report.
A company spokesperson said there was no retrenchment of employees. “We are shifting them to outsourcing firms.”
It has outsourced construction for its current and coming projects to contractors such as Larsen and Toubro to avoid delays, while facility management has been given to real estate consultants such as Cushman and Wakefield and Jones Lang LaSalle. The objective is to nurture and harness core management teams and explore outsourcing that would enhance management bandwidth and focus, the company said.
DLF has been battling a huge debt, which stood at Rs 21,730 crore at the end of the fourth quarter of 2013 and it has been on a spree to divest its non-core assets to reduce the debt burden.
However, the company is targeting bookings of eight million sq ft worth Rs 6,000 crore in the current financial year, which will improve its sales. This will come from the two existing projects in the national capital region and new projects in Lucknow (Uttar Pradesh), Panchkula (Haryana) and Chennai (Tamil Nadu), among others. In FY13, the company saw sales bookings of 7.23 million sq ft, worth Rs 3,815 crore. It also hopes to achieve a net debt of Rs 17,121 crore by March 2014 through sale of Aman Resorts, wind energy divestments, etc.
In a message to shareholders, DLF Chairman K P Singh said the real estate sector faced various challenges, including the absence of a long-term funding mechanism, prevalence of the Urban Land Ceiling Regulations Act in some states, lower floor area ratio in cities, high stamp duties and problems in land acquisition. "These sector-specific challenges became more glaring in the context of an increasingly fragile economic scenario last year and the sector's extended underperformance," he said. The real estate sector is not only a key economic sector in terms of its direct GDP (gross domestic product) contribution, it is also an important employment generator because of its forward and backward linkages with about 300 other sub-sectors.
"The company continued to steadfastly implement its strategy to focus on its core business of real estate development and leasing, launch of select residential and commercial projects in targeted geographies...Divestiture of non-core assets and reduction in debt," Singh added.
