Arabtec, the UAE's largest construction company, says it has "cut the fat" in its operations by laying off senior executives -claiming they can "do the same job elsewhere with less pay".
Speaking at a press conference on Wednesday, new interim CEO Mohammed Fahim said there were "different reasons" for laying off staff at the company's Abu Dhabi headquarters, without revealing how many staff had been cut.
And he hinted that the days of lucrative salaries with bumper benefits are now gone.
"There are some people who I would say were overpaid regarding their contracts," said Fahim. "We decided that we need to save more money, they can do the same job elsewhere with less pay. Any fat in the entity I will remove.
"We will hire people with reasonable packages, which will result in savings for the company. We are reviewing policies for payment and packages."
One former staff member, who asked not to be named, told 7DAYS that the job cuts amounted to about 150 people. 7DAYS has spoken to several Arabtec staff who say that the firm has laid off dozens of people connected to former
CEO Hasan Ismaik in its efforts to restructure.
One staff member who claimed they were laid off on June 19, along with more than 100 other employees, said: "It's a complete wipeout of everyone in there that had any connection with him."
Ismaik, who was Arabtec's largest shareholder, resigned as CEO last month, sending the company's shares plummeting on the Dubai stock market, amid market confusion over Arabtec's future direction.
However, one employee who says they were laid off agreed with CEO Fahim's comments that some executives were overpaid.
"That I agree with. Some of them were on Dhs200,000 a month for doing very little in my opinion," the source said.
Fahim's comments about job cuts follow a report by HSBC bank, which said that Arabtec will have to hire 15,000 white collar staff by 2017 to replace the axed employees and help the firm prepare for its major international expansion plans.
Another former employee questioned whether all those let go had been big earners. He said they had merely been disposable and added: "On Thursday, June 19th, we were told to go to the other building at the HQ and were laid off - one by one."
Arabtec did move to calm nervous investors yesterday by promising to improve transparency at the firm - and saying it retains the support of a major shareholder backed by the Abu Dhabi government. Arabtec shareholder Aabar Investments, an Abu Dhabi fund, last month cut its stake in the construction company from more than 21 per cent to just under 19 per cent.
Khadem Al Qubaisi, Chairman of Arabtec, said the firm is proceeding "with all projects as scheduled without cancellation or changes".
Al Qubaisi is also chairman of Aabar. He said it is possible that Aabar might increase its stake in Arabtec in the near future.
© 7Days 2014
