Major Dubai construction firm Arabtec said on Tuesday that it had laid off a “limited number” of staff in order to improve productivity and reduce costs, adding that all its actions have aimed to protect shareholders’ rights.
The brief statement to the Dubai bourse was issued after the company’s shares plunged 48 per cent this month following a decision by major shareholder Aabar to cut its stake, and last week’s resignation of chief executive Hasan Ismaik.
Sources with knowledge of the matter told Reuters on Monday that Arabtec had laid off a significant number of employees – one indicated that the number was in the dozens – in the wake of Ismaik’s departure. One source said most of the people departing had either been hired by Ismaik or were perceived to be close to him.
This raised questions over whether the layoffs could hinder Arabtec’s ambitious expansion plans, which include many billions of dollars worth of contracts in the United Arab Emirates, Egypt and other countries.
Bloomberg News reported on Monday that the number of staff laid off was in the hundreds, but Arabtec said that number was incorrect in its statement on Tuesday.
Arabtec said its structure and administration remained strong, contrary to inaccurate rumours in media. It did not comment directly, however, on its business plans post-Ismaik, on how the company would be managed, or on what would happen to Ismaik’s 28.85 per cent stake in the firm.
Abu Dhabi state fund Aabar, which owns 18.94 per cent and has considerable management influence on Arabtec, has declined to comment on its intentions.