A retail unit of troubled conglomerate Dubai World has fired 17 people, reducing its workforce by 3 percent, it said on Thursday, amid a slowdown in the retail sector and a $22 billion restructuring plan at the group.

"We have reduced our headcount in our malls by around three percent," a spokesman for Retailcorp told Reuters. "We now have staff of around 600 people."    

The company has two shopping malls in Dubai: the Ibn Battuta Mall, and DragonMart, a trading centre for Chinese products.   

Dubai World shocked markets when it announced at the end of November that it would seek a $26 billion debt payment standstill. A $10 billion bail-out by Abu Dhabi has allowed the company to continue to make debt payments, but it has yet to reach a formal standstill agreement with creditors.   

The spokesman said the move was a "normal business procedure."    

As Dubai World units undergo restructuring, Retailcorp operations have been moved under Nakheel and Istithmar World, the conglomerate's investment arm.

The company's malls are operated by Nakheel, while other retail outlets fall under Istithmar.

Launched by Nakheel eight years ago to manage the retail aspect of properties developed by Dubai World units, the company operates in the United Arab Emirates and South Africa, where it has food and sports outlets.

"The retail environment as far as Dubai is concerned has become more competitive over the past 12 months," said Laurent-Patrick Gally, analyst at Dubai-based investment bank Shuaa Capital. "The economic slowdown has impacted consumer sentiment and secondly there's more competition with new malls coming up."    

Famous for its luxurious malls and shopping festivals, the emirate's retail sector has suffered from the impact of the global financial crisis, with sales dropping as much as 30 percent in 2009. - Reuters