UAE jobs: Firms avoid mass layoffs, turn to pay cuts
As regional uncertainty persists, firms are prioritising employee retention through redeployment and adjusted schedules
There are “no systemic permanent layoffs” in the UAE, as companies believe that the regional military conflict is a temporary issue, say recruitment industry executives.
Companies in the UAE and the Gulf region are encouraging employees to take accrued leave instead of implementing systematic permanent layoffs, as business leaders seek to reduce costs responsibly while protecting the long-term interests of their organisations amid the ongoing regional conflict involving the US, Israel and Iran.
“It’s been a little over one month since the regional issues started. So far, we haven’t seen any trend of systematic permanent layoffs. This is a good sign and signals positive sentiment in the employers’ market about what the future holds. The steps taken by companies tend to indicate that almost all employers presently see this conflict as a temporary issue lasting a few weeks or months, creating momentary pressure on revenues and profitability rather than a long-term decline,” Mohammad Osama, CEO of GRG, told Khaleej Times in an interview.
A systemic layoff refers to a widespread, planned reduction in the workforce that is embedded in an organisation's structure or operational strategy.
On Tuesday, Danube Group announced that it would
not lay off any employees.
“We will not lay off any employees at Danube Group. All salaries will be paid on time. Our 6,000-plus employees are not just our workforce; they are our family,” said Rizwan Sajan, founder and chairman of Danube Group.
Sanjeev Giri, head of operations at Adecco UAE, said it is natural for employees to wonder whether challenging market conditions might lead to layoffs, salary adjustments, or temporary cost-containment measures.
“Yet the broader picture of the UAE labour market tells a more reassuring story – one of continued growth, adaptability, and forward-looking workforce strategies,” he said, adding that the key question facing business leaders is not simply how to reduce costs, but how to do so responsibly while protecting long-term organisational capability.
He noted that firms recognise that talent is an asset requiring significant time and investment to build. “Losing experienced employees during temporary downturns can create larger challenges when markets recover. As a result, organisations are adopting more flexible workforce strategies.”
Unpaid leave, salary cuts
Giri added that some sectors react more quickly than others to shifts in demand or operational pressures.
“Industries such as aviation services, retail, logistics, and energy-related services often experience early adjustments during market fluctuations. For organisations in these sectors, workforce planning becomes a critical balancing act.”
Sanjeev Giri elaborated that common approaches include offering voluntary unpaid leave options, temporarily redeploying employees to other projects, adjusting work schedules, or slowing new hiring while protecting existing teams. These measures allow organisations to navigate short-term financial pressures while maintaining workforce stability.
Mohammad Osama said these steps vary from industry to industry and from market to market.
“For example, in Saudi Arabia, particularly for companies operating in the Western Province, we haven’t seen any impact whatsoever. Similarly, in the technology sector, companies are carrying on with their projects with little to no disruption.”
He added that the most extreme cases are in the hospitality industry, where a percentage of staff have been asked to take unpaid leave until the situation eases. Other measures have included up to a 30 per cent reduction in staff salaries, which is again temporary until the situation improves.
“However, in many other industries and sectors that haven’t been impacted as much, business continues as usual. Some of the measures taken have included reduced spending on staff entertainment, business travel expenses, and, in some cases, non-essential marketing and PR,” he added.
Use accrued leave
Mohammad Osama added that some companies are encouraging employees to use their accrued leave.
“This has been seen in most companies, particularly where employees have decided to travel outside the UAE due to the current situation. While many companies have allowed their staff to work from home in Dubai, they have been more reluctant to allow them to work from outside the country. Several reasons have been cited for this, including time zone differences, access to essential connectivity tools, and the availability of a work-conducive environment,” he added.
Moreover, firms with diversified business units are deploying key staff and high-performing employees to other projects.
Giri also confirmed that firms are encouraging employees to utilise accrued annual leave.
As regional uncertainty persists, firms are prioritising employee retention through redeployment and adjusted schedules
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