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Investcorp Becomes First Bahrain Bank to Announce Job Cuts

DUBAI — Bahrain-based Investcorp became the first bank in the kingdom to announce staff cuts in the wake of the global downturn.

Investcorp is a leading provider and manager of alternative investment products with more than $17 billion in assets under management.

The announcement came after the recent job cuts announced by some property giants in the UAE, which are over 1,000.

The bank says Nemir Aj. Kirdar continues to lead Investcorp as its Executive Chairman and Chief Executive Officer.

The bank announced to cut 28 jobs in Bahrain, including 13 Bahrainis and 90 people worldwide would go, representing 20 per cent of its entire workforce.

In response to a question its spokesman told Khaleej Times that it was generally agreed that the difficult economic environment would be slow to recover.

“We are still growing our fee-based income, but have felt the impact of decline in the value of our hedge funds and the mark to market of PE and RE assets.”

While this is not just about cost saving but also about having the right business model for the future, we did not take this action lightly and would not have done it now if we had not believed it was necessary at this time.”

The spokesman said, “In response to the current global economic turmoil, Investcorp has had to realign its business, both to increase its resilience during the mid-term recessionary period and to position itself to advantage in this changed environment.”

“This has resulted in job reductions in its New York, London and Bahrain offices. These redundancies were selected on the basis of which roles were required to fit the future business model and do not reflect in any way on individuals or their performance,” he said.

“This type of action is always deeply regrettable but it has been our firm objective to treat all affected employees fairly and with dignity.”

They have been provided with a fair redundancy package as well as individual support to assist them with the transition to new jobs.”

“We are seeking to increase its resilience during the mid term recessionary period and to position ourselves to take advantage of new opportunities in this changed environment,” the spokesman said.

Regarding monetary benefits to the company he said, “The redundancies are not just about cost saving, but about having the right business model for the future. However, of course they will reduce our costs too. We cannot disclose the amount at this time.”

Earlier, Moody’s Investors Service has downgraded the long- and short- term deposit ratings and the bank financial strength rating of Investcorp Bank to Baa3/Prime-3/D+ from Baa2/Prime-2/C-.

In November this year, Barclays Private Equity and Investcorp announced that they had completed the acquisition of N&W Global Vending, the leading pan-European manufacturer of food and beverage vending machines from Argan Capital and Merrill Lynch Global Private Equity.

abdulbasit@khaleejtimes.com