Bankers who have been dismissed in the United Arab Emirates (UAE) might struggle to find work as the region grapples with the impact of oil below US$30.
Banks in the country might have recently cut as many as 1,500 jobs, according to financial recruiters and Bloomberg calculations.
While dismissals are taking place at international companies such as Standard Chartered PLC and HSBC Holdings PLC, local lenders, once seen as a safe-haven for seasoned expatriate bankers, have also dismissed workers. In some cases, they have explicitly said that expatriates will bear the brunt of the job cuts.
“Low oil prices have run through all industries in the region and hit the financial sector hard,” Trefor Murphy, managing director of recruiter Morgan McKinley in the Middle East and North Africa, said in a telephone interview. “It’s now an extremely challenged market. You’ll see an exodus of bankers.”
The oil slump is draining billions of US dollars from the banking system, stock markets are volatile, investment is slowing and global banks are firing workers to boost returns. After expanding teams, local lenders are now making cuts as the plunge in oil tightens liquidity and defaults rise.
The lay-offs are also happening globally: Barclays PLC plans to make about a quarter of 1,000 planned job cuts in Asia, according to people familiar, while Morgan Stanley is cutting 1,200 workers worldwide, a person briefed on the matter said.
In recent years, some expatriate bankers started second careers with UAE firms as lenders based in London, New York and Zurich scaled back after the financial crisis. First Gulf Bank PJSC, the third-largest lender by assets in the UAE, hired Simon Penney from Royal Bank of Scotland Group PLC to head its wholesale banking unit and Steve Perry from Standard Chartered to run its debt market division in 2013.
As recently as March last year, banks and financial institutions were increasing hiring at the fastest pace among Middle East employers as the region’s governments planned infrastructure projects, recruiters Monster Worldwide Inc said at the time.
Now, with oil trading at US$28 per barrel and many of those projects on hold, the situation is quickly changing. Financial hiring ranks number sixth or seventh among industries, Sanjay Modi, managing director of Monster.com for India, Middle East, Southeast Asia and Hong Kong, said by telephone.
HSBC laid off about 150 employees at its retail, commercial banking operations in the UAE, a person with knowledge of the matter said in November. Standard Chartered also cut about 100 positions at the end of the year, the recruiters said, asking not to be identified because the matter is private.
BNP Paribas SA was considering more than 100 job cuts in October last year, two people with knowledge of the matter said at the time.
Among the local lenders, National Bank of Ras al-Khaimah PSC on Wednesday said that it was cutting 250 expatriate positions after headcount had grown by 600. First Gulf Bank cut close to 100 jobs, Reuters reported in November last year.
Another option for those leaving the large banks has been to set up independent advisory companies after leaving jobs at places like Deutsche Bank AG and JPMorgan & Chase Co.
For example, Nadeem Masud, Deutsche Bank’s chief country officer for the UAE, said earlier this month that he left to join a Middle East-focused private equity and advisory firm.
Now, with only so many deals to go around, some boutiques might not survive, according to KPMG. Others are exploring new business ventures within the country.
While many bankers would want to remain in the UAE, lured by year-round sunshine, tax-free salaries and higher bonuses than their counterparts in Europe and the US, expatriates have limited time to find work until their work permits expire.
“We will see many candidates leaving the region as the market here is not sophisticated to the extent of understanding mid-career changes,” said Adam Man-Cheung, operating director of finance and financial services at recruiter Michael Page International PLC in Dubai. “Hiring will be more strategic. Banks want to wait and watch for the time being.”
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by