Petrofac fires 200 UAE staff, end-of-service payouts in doubt

Dubai: Petrofac has begun firing hundreds of staff in the UAE with a day’s notice, leaving long-serving engineers and managers fearing they may never see their legally mandated end-of-service benefits, even as the group’s holding company goes through a court-supervised administration in the UK.

Around 180 people in the UAE connected to an offshore wind grid programme that underpinned most of the company’s engineering and construction revenue were laid off on November 18, and were told that their roles were ending, with November 19 set as their last working day, sources close to the matter told Gulf News. Laptops, access cards and ID badges were collected the following morning. Employees say salaries are being paid only up to November 19, with no clarity on notice periods or gratuity.

“We were all told that some 190 or 200 of us were getting terminated that day itself, with the next day being our last working day,” said one long-serving employee at Petrofac. “We were told that on Friday we will be paid our salaries up to the 19th and that is it.”

Gulf News also learnt that employees in the UAE who were laid off were informed that Petrofac would write to them within the required 14-day period (starting November 19) regarding their final dues.

Those laid off include project directors, senior engineers and support staff linked to the now-terminated two-gigawatt offshore wind transmission programme in Europe.

One source described the day as “really very bad, emotional”, with colleagues “hugging each other, wishing everyone good luck” before handing in company equipment.

“In summary, we were given our notice in one day,” said another project director. “We had a town hall where we were informed of immediate termination on November 19. We asked about our notice period, end of service, the legal entitlements. We were not given any clear answer.”

He added that some colleagues had spent up to 20 years at the company. “We have single moms on the project, supporting two ladies. It is really pathetic.”

Employees say they have been told to expect a calculation of their dues by email within about two weeks, but no payment timeline or firm commitment has been given.

The core fear among staff is that end-of-service benefits, or EOSB, will not be paid once Petrofac completes asset sales and moves cash out of the UAE.

“It all came to a head when one of our major clients, TenneT, terminated our contract because our financial restructuring did not go according to some milestones that TenneT had set us,” said the first manager, who wanted to remain anonymous. “Almost instantly, Petrofac flopped and went bust, pretty much.”

He said staff had raised EOSB concerns internally for years. “This was known from the past four years, and clearly they did not do enough about it.”

Another senior project manager echoed the sentiment. “They terminated the people, and they declined to pay the notice period,” he said. “The other concern is that they are not going to pay end-of-service benefits. They did not say it clearly, but they have this intention in mind.”

He argued that the UK-appointed administrator is “seeing the value only from the UK perspective, not from UAE point of view”. “So they will take any single dollar or deposit in the banks here, it is being transferred to UK, and later on, they will sell the operating unit in the UAE, take the money, transfer it to UK and then announce the bankruptcy in order to delete our end-of-service benefits.”

Some employees have already filed cases with the Ministry of Human Resources and Emiratisation (MOHRE), seeking to ring-fence EOSB before any sale proceeds are moved out.

“I filed a complaint on MOHRE, I stated that this is not exactly a complaint, but a request to ensure that my EOSB will be paid when it falls due in mid-February,” said one manager. “I tried telling him that by that time, the horse would have bolted from the stable, if they arrange a sale and the money gets transported to the UK, we will come up empty handed.”

Another spokesperson said: “MOHRE came to our HR yesterday and spoke with him in very serious way. They told them, as long as you exist, you did not bankrupt, you have to pay people and you have to compensate.”

Employees say they are now organising complaints and taking legal advice in parallel. “We will be fighting,” one of the sources told Gulf News. “This is not something that will solve in the next day.”

The UAE layoffs are part of a wider cull that began soon after Petrofac’s Dutch client TenneT terminated its scope on a 2GW offshore wind grid programme that underpinned most of its engineering and construction revenue.

One director said the programme covered six major projects and had effectively been the company’s “black horse” for the last two to three years, generating cash that supported other parts of the business.

According to staff, about 400 to 500 colleagues across Sharjah, site teams and the Chennai engineering centre were affected, including earlier rounds in India and Malaysia. The November 18 town hall in Sharjah was described as the “last part” of that programme, leaving around 200 colleagues in the UAE execution centre without jobs from the next day.

“There will be more people to be terminated soon,” one senior manager warned, estimating that up to 70% of Petrofac’s UAE staff could eventually be released as the administrator pushes to cut costs.

Petrofac’s holding company applied to the High Court in London on October 27 to appoint administrators after TenneT cancelled its scope on the 2GW offshore grid programme. The company has said this is a “targeted administration” of the ultimate holding company and that operating subsidiaries continue to trade while restructuring and M&A options are explored.

The Dutch-German 2GW framework, shared with Hitachi Energy, was valued at about $14 billion and accounted for more than 80% of revenue in Petrofac’s engineering and construction division, according to court filings.

TenneT has said it terminated Petrofac’s scope after the company failed to meet contractual obligations and has brought in a replacement contractor alongside Hitachi Energy.

Petrofac has faced mounting pressure since it pleaded guilty in 2021 to failing to prevent bribery on historic Middle East contracts, which resulted in heavy fines and damaged its standing with lenders and clients. A court-approved restructuring plan earlier this year was overturned on appeal, leaving the company reliant on a fragile financing structure that could not withstand the loss of the 2GW contract.

What angers staff most in the UAE is not the job loss itself, but the way it has been handled in a market where end-of-service benefits form a critical part of long-term financial planning.

 “The concern of the people is not losing the job,” said one project manager with over 15 years’ service. “Losing the job is part of the business. It is normal. But if you want to release them, release them decently, with their notice period and end of service. This is UAE law. This is the concern for our team.”

Another senior employee, close to retirement, said he feels particularly exposed. “There are many others like this. They all have their families to run, liabilities to attend to. And you cannot on Wednesday say that the taps will be turned off on Thursday. That is frightfully unfair.”

In a written statement to Gulf News, Petrofac said operations on its UAE project portfolio “are continuing as normal” and that it is focused on “preserving value, operational capability and ongoing delivery across the Group’s operating and trading entities while options are being advanced to underpin their long-term future.”

 The company confirmed that early-release notices had been issued to colleagues whose roles are linked to the terminated 2GW programme, saying: “The previously announced termination of Petrofac’s role on the Dutch-German 2GW offshore wind programme by TenneT has meant that early-release notices have been issued to colleagues whose roles are connected to this programme. We recognise this is a challenging time for our people and we remain in close coordination with them and the Ministry of Human Resources and Emiratisation.”

The engineers and project managers, now out of work,  want to know whether years of service in the UAE will still entitle them to the end-of-service safety net the law promises, or whether the money will be gone by the time their claims fall due.