Istithmar World, the investment unit at the heart of Dubai’s financial crisis, has made most of its staff redundant as the emirate cuts costs further to deal with the regional economic downturn sparked by the sustained slump in oil prices and global economic weakness.

More than 15 staff at the unit given the task of selling the assets of its parent Dubai World have been given their notice and will gradually exit the company in the coming months, people aware of the matter said.

“This is an important cost rationalisation,” said one executive briefed about the decision. “Just a skeleton staff will remain — it was too expensive.” Dubai World declined to comment.

Istithmar will continue as a corporate entity, but negotiations over asset sales will be handled by other government bodies, such as Investment Corporation of Dubai, the state entity that holds the emirate’s corporate crown jewels, such as Emirates airline.

Istithmar, or “investment” in Arabic, retains stakes in assets such as boutique investment bank Perella Weinberg Partners, retailer Barneys New York, Hong Kong’s Hans Energy and game reserves and resort lodges in Africa.

Dubai has the most diversified economy of the oil-rich Gulf and is still seeing strong growth in sectors such as aviation.

But the tourism- and services-oriented emirate is nonetheless feeling the reverberations of a sustained drop in oil prices.

Dubai is also weighed down by a debt burden of 126 per cent of gross domestic product, including $52bn of bonds and loans coming due over the next three years.

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The downsizing at Istithmar reflects the growing number of redundancies across the city as businesses trim workforces or replace older professionals with younger staff.

Istithmar rose to prominence before the global financial crisis with debt-fuelled acquisitions of global companies such as Time Warner, Standard Chartered and global hotels and real estate such as the Mandarin Oriental hotel in New York.

After Dubai’s economy was hit by a real estate crash, some of Istithmar’s mortgaged assets were reclaimed by banks with the remainder being sold off over time in a bid to repay creditors under the terms of the $25bn restructuring of parent Dubai World in 2011.

But the value of the sales was not enough to repay the overall debt and in 2015, creditors agreed to restructure the 2011 agreement and extend Dubai World’s repayment of $14.6bn until 2022.

The last assets held by Istithmar are proving difficult to sell, bankers say.

Attempts to sell Istithmar’s lossmaking, retired Queen Elizabeth 2 cruise ship, or refurbish the historic liner as a hotel, have so far failed and the vessel remains docked at Dubai’s Port Rashid harbour.

“This is the final stage of a multiyear run off, and while these last assets will take time to unwind — you don’t need a huge infrastructure to do so,” said a senior banker.