Mashreqbank PSC, Dubai’s third-biggest lender, plans to move nearly half of its employees to cheaper locations and allow some others to work from home as part of a dramatic reorganization that will spare its Emirati staff, according to people familiar with the matter.
The oldest privately owned bank in the United Arab Emirates notified employees this week that it will be shifting jobs to locations including India, Egypt or Pakistan, the people said, asking not to be identified because the information isn’t public.
Mashreq will also eliminate a significant number of existing roles and create new positions for staff moving to what it calls “centers of excellence,” they said.
The bank didn’t immediately respond to an email seeking comment. Mashreq and its subsidiaries employed almost 5,000 people as of September 2019.
As the pandemic transforms how and where people work, the planned move is an echo of a shift by other financial firms that are looking to set up bases in lower-cost locations. In the U.S., companies from Goldman Sachs Group Inc. to Paul Singer’s Elliott Management Corp. have looked outside Manhattan and bulked up their presence in Florida.
Lenders around the world have cut thousands of jobs as they slash costs to weather an economic downturn and adapt to a move to digital services. Banks in the Gulf’s expatriate-dominated economies additionally have had to contend with a period of lower oil prices and weaker profitability.
While shifting back-office operations to cities where salaries are a fraction of what bankers earn in the UAE isn’t entirely new, the scale of the planned shift by Mashreq is sizable.
Some employees will be permanently allowed to operate remotely in the offshore centers, the people said. The company is planning to lower salaries for an additional 7% of its remaining UAE staff by turning those jobs into work-from-home positions.
The relocation plan is expected to be completed in three phases by October this year. The changes will exclude Mashreq’s Emirati employees, the people said.
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