Job Cuts Proliferate in Dubai

"Hiring freeze" and "lay-off" are probably the two most popular terms right now - in Dubai.

That's the word from Shuaa Capital, the United Arab Emirates' largest investment bank by market share.

The latest example: Istithmar World, a private equity firm that's part of the state-run Dubai World conglomerate, just eliminated 13 jobs, or 10 percent of its workforce, citing "external market conditions." Sunday's cutback doesn't affect Istithmar's New York office, which opened last October, a spokesman told the Associated Press.

Shuaa Capital itself cut 21 jobs, or 9 percent of its staff, in December. The majority of the cuts involved middle and back office positions and "non fee-based businesses," the Dubai-based, publicly traded firm said last month. Shuaa is shifting resources to areas "where we see demand in 2009, such as the Kingdom of Saudi Arabia and Qatar, and increasing our market share in brokerage and asset management."

Local Real Estate Sector Is Hardest Hit

Layoffs have been most visible in Dubai's formerly booming real estate sector. In November another Dubai World subsidiary, the Nakheel property development firm, cut 500 jobs, or 15 percent of its staff.

In a report Sunday, Shuaa estimated that Dubai's population - of which foreign workers make up almost 90 percent - will shrink 5 percent this year, largely due to layoffs.