BNP Paribas, France's largest bank, is to close its Dubai office and cut almost 40 percent of employees at its Middle East headquarters in Bahrain by June, as part of a huge restructuring.
Around 120 of the circa 320 staff in the Bahrain capital of Manama have been informed they are to lose their jobs and were placed into a formal redundancy programme last month.
The decision affects back-office staff initially, such as those in finance, IT and HR.
It is understood that one tranche will be let go or transferred to other parts of the business by March, and the other by June.
A small number of staff are expected to remain beyond this date until new arrangements are in place, but all have been advised to look for jobs elsewhere in the meantime.
It is understood that at-risk staff were informed two weeks after a company-wide meeting in October chaired by regional CEO Jacques Michel.
During the meeting, Michel said the bank is going through challenging times and will be implementing a process of phased restructuring in line with plans already in the public domain to shrink its global operations by 20 percent by 2019.
In Bahrain, it is thought the bank aims to eventually cut all but four of its 30 operations staff who are are involved in the processing of payments and transactions.
It is not clear how many people the retrenchment could affect beyond June, but the internal announcement has fuelled concern that employees unaffected by the decision at present could be placed at risk at a later stage.
One anonymous source within the Bahrain division told Arabian Business the atmosphere at the office was bleak and that “everybody was very scared”.
Bloomberg reported in October that BNP Paribas worldwide is reorganising its investment bank, run by Yann Gerardin, to cut costs as global lenders face stricter rules and increasing compliance needs.
It reported that more than 100 of the circa 560 staff in the GCC region were likely to be affected, with most of the reductions expected to occur in Bahrain.
The bank enlisted management consultancies Oliver Wyman and Boston Consulting Group to work on the restructuring plans after the bank merged its GCC operations into an expanded Europe, Middle East and Africa region in 2014.
Arabian Business understands that offices in the UAE, Qatar and Kuwait will also be hit. For example, all circa 70 staff at the bank’s secondary HQ in Dubai have been placed into a redundancy programme and the office will close next year with some staff transferred to Bahrain.
The bank is not expected to exit Bahrain entirely, despite the country struggling to plug a budget deficit of more than $3.8 billion. It is thought Bahrain will continue as the main hub for BNP Paribas MEA.
It is understood the retrenchment will not result in the closure of any branches in Dubai or elsewhere in the GCC.
The bank is also expected to retain a strong presence in Riyadh because of regulations in Saudi Arabia that stipulate that any bank conducting transactions in the kingdom must also have a branch there.
The GCC banking sector overall has been hit by economic uncertainty and falling oil prices.
BNP Paribas’ revenue in the GCC was €121 million ($135 million) last year, according to company filings, while in Bahrain, revenue for the period was €54 million.
Jacques Michel replaced Jean-Christophe Durand as head of MEA for corporate and institutional banking in August.
Prior to his appointment, Michel was country head of BNP Paribas India since December 2009 and a member of the executive committee of BNP Paribas Asia Pacific.
A spokesperson for BNP Paribas MEA declined to comment.