DUBAI, June 23 (Reuters) - Emirates NBD, Dubai’s largest bank, began cutting hundreds of jobs this week after the impact of the coronavirus crisis accelerated planned lay-offs, three sources said.
Although the full scale of the redundancies was not immediately clear, one source estimated Emirates NBD is cutting some 10% of its staff, equivalent to around 800 people.
The majority were made in the United Arab Emirates (UAE), the Arab world’s second-biggest economy, they told Reuters.
Emirates NBD said in a statement sent to Reuters that recent developments have had a significant impact on the economy, the financial services sector and the bank.
“This has meant letting go of some of our colleagues as we right size to meet our anticipated future business needs, especially in the light of the economic forecasts that point towards challenging times ahead,” it said.
“We remain optimistic that, as the UAE economy opens up, Emirates NBD will have the right structure to continue to support customers and help businesses grow and prosper.”
A second source said the cuts will likely include employees from the private banking arm and other parts of Emirates NBD.
“It was already in the plan for 2020, especially with the digitalisation of the bank, but the impact of coronavirus accelerated it,” one of the sources said.
Emirates NBD planned to invest 1 billion dirhams ($272 million) in digital technology over four years ending 2020.
Credit ratings agency Moody’s changed its outlook to negative this month, citing “a challenging operating environment in the UAE due to the coronavirus outbreak, low oil prices and pre-existing economic challenges.”
The bank reported falling profits in the first quarter. It also said impairment allowances rose in anticipation of a deterioration in credit quality. ($1 = 3.6728 UAE dirham) (Reporting by Hadeel Al Sayegh, Saeed Azhar and Yousef Saba; Editing by Alexander Smith)