Amid ongoing regional uncertainty, companies are focusing on retaining employees through redeployment and modified work schedules.
Recruitment industry executives say there are “no systemic permanent layoffs” in the UAE, as companies view the regional military conflict as a temporary challenge.
Companies in the UAE and the wider Gulf region are encouraging staff to take accrued leave and are using other cost‑saving measures rather than resorting to widespread, permanent layoffs, as business leaders try to manage expenses responsibly amid the ongoing regional conflict involving the US, Israel and Iran.
“It’s been just over a month since the regional tensions began, and so far, we haven’t observed any systematic permanent layoffs. This is a positive sign, reflecting employers’ optimism about the future. The measures companies are taking suggest that most view the conflict as a temporary issue—lasting weeks or a few months—causing short-term pressure on revenues and profitability rather than a long-term downturn,” Mohammad Osama, CEO of GRG.
A systemic layoff is a planned, large-scale workforce reduction embedded within a company’s structure or operational strategy.
On Tuesday, Danube Group announced 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, noted that it’s natural for employees to worry about layoffs, salary cuts, or temporary cost-saving measures during challenging market conditions.
“However, the broader UAE labour market tells a more reassuring story—one of continued growth, adaptability, and forward-looking workforce strategies,” he said, adding that the real challenge for business leaders is not just reducing costs, but doing so responsibly while safeguarding long-term organisational capability.
He highlighted that companies view talent as a valuable asset that takes significant time and investment to develop. “Losing experienced employees during temporary downturns can create bigger challenges when markets recover. Consequently, organisations are adopting more flexible workforce strategies.”
Unpaid Leave and Salary Adjustments
Giri explained that some sectors respond faster than others to changes in demand or operational pressures.
“Industries like aviation services, retail, logistics, and energy-related services often make early adjustments during market fluctuations. For companies in these sectors, workforce planning is a delicate balancing act.”
Common strategies include:
- Offering voluntary unpaid leave
- Temporarily redeploying employees to other projects
- Adjusting work schedules
- Slowing new hiring while protecting existing teams
These measures help organisations manage short-term financial pressures while maintaining workforce stability.
Mohammad Osama noted that these approaches vary by industry and region:
- In Saudi Arabia’s Western Province, companies have seen little to no impact.
- The technology sector continues projects with minimal disruption.
- The hospitality sector is most affected, with some staff on unpaid leave and temporary salary reductions of up to 30%.
In less impacted industries, companies have focused on cost reductions in non-essential areas like staff entertainment, business travel, and marketing.
Using Accrued Leave
Osama added that some companies encourage employees to use accrued leave, especially when staff choose to travel outside the UAE due to the current situation. While many firms allow working from home within Dubai, remote work from outside the country is limited due to:
- Time zone differences
- Access to essential connectivity tools
- Availability of a suitable work environment
Firms with diversified operations are redeploying key staff and high-performing employees to other projects. Giri confirmed that encouraging employees to use accrued annual leave is a common practice.
