Gunne New Homes cuts jobs as property stagnates

THE PROPERTY slowdown has forced multinational real estate firm CB Richard Ellis (CBRE) to axe jobs from part of its Irish operation.

The Irish Timeslearned yesterday that Gunne New Homes, part of CBRE's Irish operation, has told staff that a number of people will have to be let go to stop the business from losing money.

A memo from management circulated to workers yesterday states that the job cuts are "an effort to bring the business back to break even at a trading level".

The memo, from Pat Gunne, who runs the business, states: "As you know, it is very difficult out there, particularly in this area, and having explored other options to keep the business going in its current guise, we have no choice now but to carry out the rationalisation."

It points out that the decision is not a reflection on those working in Gunne New Homes.

It was not possible to establish how many jobs are going, but the figure is thought to be less than 20.

The agency sells houses in the high-profile Adamstown development on behalf of developer Castlethorne. It also works for Liam Carroll's Zoe Developments.

Its decision to lay off workers is further evidence of the slowing housing market, and particularly that potential first-time buyers are not coming into the property market.

The news comes in the same week that it emerged that another real estate agent, Lisney, is cutting pay across the board by 10 per cent. The company said the reduction will operate from the top down.

And, according to media reports, UK-based international agent DTZ, which has a stake in Irish firm DTZ Sherry Fitzgerald, is letting 50 people go from its 2,000-strong workforce.

CBRE Gunne New Homes and Lisney are the only Irish agencies known to have taken deliberate cost-cutting measures so far. But industry sources expect a lot more of these businesses to begin tightening their belts over the coming months. Rumours of salary cuts and job losses are now circulating daily in the sector.

Aidan O'Hogan, chairman of Saville HOK, told The Irish Timesyesterday that his business was watching its costs carefully but that it did not intend cutting jobs or pay. He said that the company did not replace a number of people who moved out of its new homes division last year.

"New homes are actually up, but a lot of that is in the first quarter. Second-hand residential has also increased."

He added that in the commercial and industrial side of the business, activity has swung towards letting rather than selling, the direct opposite of recent years, where the emphasis has been on selling rather than letting.

Mr O'Hogan said that the difficulty for everyone involved in the property market in borrowing money from the banks was the main reason for the Republic's slowing property markets.

"It's all purely a function of finance."