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Morgan Stanley has confirmed that it is making up to 15% of its Dubai staff redundant, while rumours abound that other international firms are making similar cuts.

Any thoughts that Dubai might offer sanctuary to out-of-work Western investment bankers must surely have gone out of the window, as struggling firms are forced to trim their Middle Eastern staff.

“The bank has made final reductions last week, with a total number between 10 and 15 people from more than 110 in the Dubai International Financial Centre (DIFC) office,” said Georges Makhoul, managing director and regional president of Morgan Stanley’s operations for the Middle East and North Africa.

Meanwhile, Goldman Sachs, which made 10% of its staff redundant globally, has included its Dubai-based workforce in the cuts. An anonymous spokesperson tipped off Dow Jones newswire, saying that employees in the DIFC would be affected, but refused to give exact numbers.

Analysts predict more cuts could be on the cards.

“When demand drops, the first people to go are in sales; it will be frightening when they let go of people in research and the investment bankers because then it’s not a matter of demand or a cycle, it’s a matter of fundamental exposure,” said Yazan Abdeen, a fund manager at ING Investment Management.

Headhunters in the region tell us that Standard Chartered and Merrill Lynch have also been trimming headcount in the GCC, but the banks were unavailable for comment. Credit Suisse has also made redundancies, but continues to recruit in other areas.

You would have thought that Lehman Brothers' Middle Eastern employees would have been for the chop following its acquisitions by Nomura. However, the team has been integrated by the Japanese bank and will soon start investment banking acitivity in Saudi Arabia.