DUBAI (Agencies): Mashreq Bank, Dubai’s third-largest lender, is planning to move nearly half of its employees to cheaper locations and allow some to work from home, as part of a dramatic reorganization that excludes Emirati employees, according to sources familiar with the matter.
The oldest privately-owned bank in the UAE notified employees this week that it would move its jobs to locations including India, Egypt or Pakistan, according to the sources, who asked not to be identified because the information is not public.
The sources told Bloomberg News that Mashreq Bank will also eliminate a large number of existing jobs, and create new jobs for employees who move to what it calls “centers of excellence.”
The bank did not immediately respond to an email request for comment.
The number of employees at Mashreq and its subsidiaries is about 5,000 people, according to September 2019 data. This step reflects a shift by financial companies looking to establish bases for themselves in low-cost locations after the pandemic changed how and where people work.
In the US, companies such as Goldman Sachs Group and Elliott Management Corp. owned by businessman Paul Singer have looked to locations outside of New York and established themselves in Florida.
Many banks around the world have cut thousands of jobs as part of cost-cutting operations to counter the economic downturn and adjust to the shift toward digital services. Moreover, banks operating in the Gulf economies that are dominated by foreign expatriates had to cope with a period of declining oil prices and low profitability. The back-office operations (that do not require dealing with clients) were transferred to other cities because salaries are a fraction of what bankers in the UAE earn, and this is not entirely new, but the scale of the transformation planned by Mashreq is significant.
The sources said that some employees will be allowed to work online permanently in external centers. The bank plans to further reduce the salaries of the remaining employees in the UAE by 7 percent when these jobs are transferred online.
It is expected that the transfer plan to new sites will be completed by October of this year in three phases.