Dubai investment firm sheds 10 percent of jobs

DUBAI, United Arab Emirates - A Dubai investment company said Sunday it is shedding 10 percent of staff, making it at least the second government-owned employer here to announce job cutbacks because of the economic downturn.

Istithmar World said Sunday it is cutting the 13 jobs because of "external market conditions" and to match its resources with current needs.

"We remain confident of our investment strategy for driving long-term growth and above-average returns, and have adjusted our short-term business plan to capitalize on the opportunities that will open up when the economic recovery begins," the company said in a brief statement.

The announcement comes less than two months after one of Istithmar's sister companies, developer Nakheel, cut 500 jobs, or 15 percent of its staff, and said it was slowing work on a number of high-profile projects. Both companies are part of state-run conglomerate Dubai World.

Analysts have warned that Dubai's large debt load could force the booming city-state to slow its growth in response to the global economic crisis.

Dubai World companies and other state-affiliated businesses dominate the local economy, so their continued health is seen as vital to the city-state's success. Several privately owned developers and construction companies have also announced layoffs.

Shuaa Capital, a publicly listed financial services firm in Dubai that trimmed staff of its own last month, predicted in a report Sunday that job cuts are likely to shrink the city-state's largely foreign population by 5 percent in 2009.

"Hiring freeze and lay-off are probably the two most popular terms in Dubai right now," Shuaa's chief economist and strategist, Mahdi Mattar, noted in the report.

Istithmar was set up in 2003 to pursue investments worldwide. Its holdings include stakes in banks Standard Chartered and Arcapita. It and Nakheel last year bought a 20 percent share of circus touring group Cirque du Soleil.

In an effort to broaden its portfolio, Istithmar opened an office in New York last October. A spokesman said that office was unaffected by Sunday's cutbacks.

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