"We have slashed workforce by five per cent and reduced salary by an average 10 per cent," an Omaxe spokesperson said.

She said the company had laid off 70 employees over the last two months, in order to reduce expenditure on salary head.

On salary reduction, she said: "Salaries of all employees except those who earn Rs 10,000 or less a month have been reduced."

Omaxe's consolidated net profit declined to Rs 20.38 crore for the quarter ended September 30, 2008, from Rs 160.35 crore in the year-ago period. Its total income fell to Rs 213.48 crore, from Rs 712.11 crore in the review period last fiscal.

Another leading realty firm, Parsvnath, had said on Tuesday that it had reduced the salaries of its employees at top and middle level management by up to 20 per cent.

The demand in the real estate sector, particularly in the housing segment, has declined significantly because of high interest rate and ongoing global financial crisis.

In order to boost the demand, CREDAI and NAREDCO – the two leading industry bodies-- have asked its members to reduce prices for their properties.

These associations' directions to the developers came after the former Finance Minister P Chidambaram had asked the industry to cut the price in order to stop inventory pile up and boost demand.