Expats leaving due to recession?

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Posted by dadda (357 days ago)

here it is for Ed the Scrooge...

Exodus of expats foreseen as crisis takes toll on jobs
Lay-offs in financial sector could drive westerners away
Joyce Man
Updated on Dec 01, 2008
The tinsel and carols have gone up to signal that Christmas is on the way, but for John, a banker, the past few weeks have been "a logistical nightmare".
The reason? He lost his job last month and has to head home this week.

John has spent the past month in discussions about breaking his lease, taking his children out of school, packing up his home and also saying farewell to friends.

"It has been terrible. It was a surprise. It took everyone by surprise," said the Australian, who has lived in Hong Kong for nine years with his wife and two children, aged 9 and 11.

"In the current climate, we decided it was the best option," he said.

He plans to wait in Australia for the economic turmoil to calm down and apply for jobs in Hong Kong as soon as possible.

The Immigration Department, the Trade Development Council and consulates do not keep figures on the number of foreign workers leaving the city permanently, but many expatriates say they are going home.

Some predict an exodus and a repeat of the situation during the 1998 financial crisis and the outbreak of severe acute respiratory syndrome in 2003. Restaurants, bars, recruiters and property companies are watching for a major shift in business, while schools are monitoring changes in enrolment and waiting-list numbers.

Ben Tyrrell, director of removals firm Relocasia, said: "This is not dissimilar to what happened during Sars, when we had people wanting to move the next day. People don't do that unless they sense dark clouds on the horizon."

Mr Tyrrell has seen many foreigners - including chief financial officers, middle-class corporate staff and recent graduates - deciding to move and leaving the city within days.

The company, most of whose clients work in banks and live in upmarket areas, saw outbound orders rise by 65 per cent last month and expects a 100 per cent increase for this month, compared to the same month last year. Most of the orders for last month were made by Britons, Australians and Americans.

"They're either deciding to take redundancy packages or are being forced to leave," he said. "It's been phenomenally busy."

Recruitment agencies predict expatriates will leave when they fail to find jobs.

The agencies would be able to source positions for lower-level staff - compliance officers, auditors, product controllers and technical staff - but it would be difficult for senior candidates, said Mark Enticott, associate director of banking and financial services at executive search firm Michael Page.

He predicted that many people would move in the next six to 12 months. "Naturally that happens. We saw it during the last two financial crises," he said.

Restaurants are bracing for a drop in business. "There's probably going to be a bit of an exodus," said Chris Lenz, founder of Igor's Group of Restaurants, which includes Stormy Weather, The Keg and Wildfire.

He said one of his regulars lost a job last Monday, and another last Tuesday. He expects a 20 to 25 per cent drop in income next month and in February compared to the same months in recent years, partly because expatriates would leave.

Buggle Lau, chief analyst at Midland Realty, said luxury property rents would drop when expatriates left. "Even those who are lucky enough to keep their jobs upon the expiry of their contracts will relocate or they will negotiate with their landlords," he said. Rents on the south side of Hong Kong Island, in Mid-Levels and in West Kowloon had dropped by 15 to 20 per cent up to October, he said. He expects another 10 to 15 per cent fall in the first quarter of next year.

The only places reporting stability are schools, possibly because parents do not want to uproot children mid-term. Hong Kong International School and the English Schools Foundation say enrolment and waiting list numbers have not changed from last year. The ESF even received 10 per cent more applications than last year for first-year spaces, said Peter Craughwell, head of corporate communications. But he said they were monitoring the situation.

Businesses say worse is yet to come. HSBC, Citibank, DBS, Morgan Stanley, Goldman Sachs and Merrill Lynch only announced job cuts last month. They say the period from now until the end of the year will be the lull before the storm as the unemployed seek new jobs.

However, some expect fewer people to leave than in 1998 and 2003.

"There is a fundamental difference between expats now and then," Mr Lenz said, noting they had started owning property, which was very rare in the 1990s.

"A lot of expats see Hong Kong as their home. Even if we see them losing their jobs, they will try to look for work here," he said.

Mr Enticott, from Michael Page, even expects new arrivals. "Asia is still seen by banks as an area where they can grow their revenue base," he said.

Joe, a broker from Britain, lost his job along with several others at his company last month, and his visa expires in June. He says the mood among his friends has been very grim, but he wants to tough it out in Hong Kong, where he has lived for several years.

"I don't want to go back to the UK unless I have to. I will stay as long as I have a visa," he said.

He plans to send out CVs in January and hopes to land a job with a visa. "You have to look at the economies in the rest of the world. Our prospects are better here," he said. "There are still firms coming to Asia."

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