Abu Dhabi lays off workers as Gulf austerity tightens

Abu Dhabi lays off staff as Gulf austerity tightens
1000’s of layoffs at state-linked corporations in Abu Dhabi are a recent signal the Gulf’s rich oil states are hunkering down for an extended interval of austerity as low crude costs stress their economies.

Since mid-2015, the United Arab Emirates (UAE), Saudi Arabia, Qatar and different nations within the area have curbed spending on some building tasks and diminished power subsidies to restrict funds deficits attributable to low-cost oil.

Now some governments are additionally beginning to scale back workers on the corporations they management, lots of them within the power business, with the intention to make sure the companies should not a drain on state funds if oil costs keep low for a number of years.

Abu Dhabi’s Nationwide Oil Co (ADNOC), with round 55,000 workers, has minimize a whole bunch of jobs in the previous few months and may have diminished its workforce by not less than 5,000 by the tip of 2016, sources accustomed to the matter instructed Reuters.

The discount will happen throughout most of its 17 subsidiaries as a part of a restructuring following a reshuffle of the agency’s management this month, they stated.

An ADNOC spokesman didn’t affirm or deny the cuts however stated: “In step with your entire oil and gasoline business, ADNOC is continually methods to be extra environment friendly and extra worthwhile, notably within the present market setting.” The UAE’s oil and gasoline recruitment market is ready for its most troublesome yr in over a decade in 2016, a report from recruiters Morgan McKinley stated.

“The oil and gasoline business remains to be feeling the ache, as was to be anticipated. General redundancies have been on the rise,” stated Trefor Murphy, managing director for the area.

Most layoffs at Abu Dhabi state companies should not in response to manufacturing cutbacks; the UAE has not diminished its oil output, and says it’s continuing with long-planned oil and gasoline improvement tasks.

Nor do the layoffs imply Abu Dhabi is operating out of cash. With a whole bunch of billions of {dollars} in its sovereign wealth fund, the emirate may draw down its reserves to maintain present ranges of spending for many years.

However the authorities desires to minimise the pace of the drawdown because it seems forward to the potential of a few years of low oil costs. Final yr, Abu Dhabi acted forward of different Gulf states in slicing home gas and electrical energy subsidies. Now it’s making use of the identical strategy to state-linked companies.

In Qatar, state-controlled companies comparable to Qatar Petroleum and Qatar Rail have been shedding workers. State corporations in different states comparable to Saudi Arabia and Oman have been methods to scale back prices however have to this point not resorted to main job cuts.

Cuts

Most cuts at state companies in Abu Dhabi and elsewhere contain international workers reasonably than locals, as a result of governments need to restrict unemployment amongst their residents.

Nonetheless, the job losses are contributing to an financial slowdown within the area. The Worldwide Financial Fund has predicted Abu Dhabi’s gross home product progress will fall to 1.7 per cent this yr from 4.Four per cent in 2015.

In neighbouring Dubai, the place the financial system is just not immediately reliant on oil and state-linked companies are vigorously pushing tourism and actual property tasks, progress is forecast to speed up marginally, to three.7 per cent from 3.6 per cent.

Firms slicing workers in Abu Dhabi embody Abu Dhabi Nationwide Vitality Co, which has diminished its workforce by 1 / 4 since 2014. It has minimize round a 3rd of oil and gasoline jobs and 55 per cent of workers at its headquarters, it stated this month after reporting a first-quarter loss.

Earlier this yr, Abu Dhabi-based Etihad Rail, the federal government-owned entity constructing a UAE rail community, stated it minimize 30 per cent of its workers in a restructuring.

Abu Dhabi Water and Electrical energy Authority laid off scores of individuals, principally expatriates, sources stated. Spokespeople for the authority didn’t return calls looking for remark.

Nationwide Petroleum Development Co, owned by Abu Dhabi’s state-owned industrial conglomerate Senaat and one of many largest oilfield contractors in Abu Dhabi, is reviewing its manpower ranges, chief govt Aqeel Madhi instructed Reuters.

Development agency Arabtec, during which Abu Dhabi state fund Aabar Investments is the most important shareholder, could embody job cuts in its price discount programme, chairman Mohamed al-Rumaithi stated final month, including: “There’s some fats to be taken out.” Some companies are axing expatriates to create jobs for UAE nationals. Medical centre operator Cleveland Clinic, owned by Abu Dhabi state fund Mubadala, is creating over 100 positions for locals, having instructed some expatriate workers they’ve to depart by year-end, sources stated.

Requested to remark, Cleveland stated that as a part of its efforts to develop native expertise, plenty of administrative roles would transfer to UAE residents in coming months.

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