Job losses for 1,500 UAE bankers as oil price plummets
Author: Kirsty Tuxford | Date: 2 Mar 2016
Bad news should just be a short-term blip, says financial recruitment expert
Financial recruiters in the region are widely reported as saying up to 1,500 bankers have lost their jobs in recent months; a consequence of the low price of oil, which is below $30 a barrel.
Local lenders such as Standard Chartered PLC and HSBC Holdings PLC, who were still recruiting at a fast pace until last March, are making redundancies in a bid to boost returns.
Oil prices have remained lower for longer than before, and the subsequent drop in government spending has resulted in slower economic growth and falling asset quality, according to financial services organisation Standard & Poor’s.
The National Bank of Ras Al-Khaimah (RAKBANK) announced on 17 January that it would be cutting 250 expat jobs. Barclays revealed in February that it would be axing just under 150 jobs in Dubai at its corporate bank, and First Gulf Bank has also made close to 100 job cuts.
“Financial services in the region have been impacted as government-related deposits have reduced, giving the financial services industry less liquidity,” says Jennifer Campori, MD of recruitment specialists Charterhouse. “This has a knock-on effect for credit growth and lending for the financial services industry. The banks have no option other than to cut back on staff, as many industries in the UAE have done. I do not believe this is targeted specifically at expats but at simply reducing staff that are not business critical.”
Bankers wishing to remain in the UAE will be wondering what options they have for a future career in the financial industry – especially in a job market that may not yet be sophisticated enough to understand mid-career changes. Plus there is the additional complication that expatriates generally require a work permit and a sponsor to be able to stay in the UAE.
The overall effect in the UAE and GCC labour market due to the banks' redundancies should not be too serious, according to Campori. “The region (in particular the UAE) will always remain attractive to people from the US and Europe,” she says. “What the region is experiencing in terms of limited career opportunities within financial services is simply a 'blip' in the market. This year is expected to be relatively flat across most markets globally; however most experts agree that the market should improve at the back-end of 2016, which in turn means more career growth.”