Jobs in UAE: Hiring freeze in some firms as employers prioritise efficiency over headcounts

Some of the employers in the UAE are prioritising efficiency over headcount with most of the companies freezing hiring and choosing instead to meet demand with existing staff, according to a new study.

Released by Cooper Fitch, the Gulf Employment Index for the first quarter of 2025 noted that this indicates “a maturing market shifting from volume hiring to strategic recruitment focused on transformation and resilience".

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"As the UAE transitions from a developed to a highly developed economy, this shift brings natural changes in hiring behaviour. Organisations are now focusing on maximising the efficiency of their existing headcount and embedding productivity into their processes,” Dr Trefor Murphy, CEO of Cooper Fitch, told Khaleej Times in an interview.

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Viewing it as “a healthy evolution”, Murphy said the UAE economy has seen substantial growth over the past three years, and even a 1.25 per cent increase in job opportunities this quarter, which is significant, especially considering it comes off an already elevated baseline.

He added this trend reflects the approach of some organisations.

“Typically, after a period of rapid growth, many companies enter a phase of consolidation before preparing for their next growth cycle. These are well-established business patterns seen in markets globally, not something unique to the UAE or the wider GCC. It’s a normal part of the economic and organisational maturity curve,” he added.

“The UAE’s non-oil economy continued to grow steadily early in the year. However, despite the rise in business activity, most companies held off on hiring, choosing instead to meet demand with existing staff,” Cooper Fitch said in its quarterly report.

The study noted that the UAE recorded a 1.25 per cent increase in hiring activity in January-March 2025, with stable demand in trade, technology, and real estate, supported by strong employer confidence.

“Early signals suggest that some traditionally high-growth sectors may be approaching a new maturity phase as the focus shifts from expansion to efficiency. These patterns raise timely questions about how the region's labour market is evolving,” said Cooper Fitch.

On Tuesday, the International Monetary Fund (IMF) said the UAE economy expanded 3.8 per cent last year and is forecasted to grow 4.0 per cent and 5.0 per cent in 2025 and 2026, respectively.

Similarly, S&P Global Market Intelligence noted that the robust non-oil sector growth is supporting employment in the UAE. The UAE’s non-oil economy is projected to grow 5.2 per cent in 2025, helped by tourism, real estate, finance and other sectors.

Impact of tariff war on the GCC job market

The tariff row triggered by the US in early April, followed by a 90-day pause, has added complexity to global trade dynamics and could impact the job markets.

The ongoing trade war between the US, China and other countries has severely hit the global markets and economy, causing uncertainty. US President Donald Trump has announced taxes of up to 145 per cent on Chinese goods imported into the US.

The Cooper Fitch study, however, noted that although the GCC is not directly involved, the potential impact on oil demand, trade routes, and investment sentiment could affect employment in the energy, logistics, and tourism sectors.

“These developments reinforce the region's urgent need for economic diversification and workforce resilience,” it said, adding that since oil exports remain exempt from new tariffs and immediate labour market disruption is expected to be minimal, sectors with US-bound exports, such as aluminium and petrochemicals, are now reassessing hiring and production strategies.

“The pause has helped restore short-term investor confidence, but continued trade negotiations and broader sentiment may still influence hiring decisions in the months ahead,” it said.

The recruitment firm noted that these shifts may accelerate efforts to strengthen intra-GCC trade, domestic production, and high-value sector growth, potentially unlocking new employment opportunities in logistics, food production, and advanced manufacturing. As a result, the region is increasingly focused on development and building a more resilient, locally-rooted workforce aligned with long-term national visions.

“Employment growth in the GCC is increasingly strategic rather than purely expansionary. Hiring is being shaped not just by demand but also by transformation agendas, regulatory shifts, and a focus on long-term sustainability,” it added. 

Waheed Abbas

waheedabbas@khaleejtimes.com

Waheed Abbas is Assistant Editor, covering real estate, aviation and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.