Hiring activity in the Gulf has held up in sectors such as technology and health care, but the Iran war has significantly affected jobs in tourism and hospitality, recruitment specialists have said.
The war that began on February 28 with attacks on Iran by the US and Israel led to strikes on the Gulf by Tehran. Sectors such as aviation and hospitality, which were heavily disrupted, have been rebounding since the ceasefire between the US and Iran was agreed to on April 8.
The impact of the war on the jobs market has been uneven. Hospitality, food and beverage, logistics, aviation and tourism have felt more immediate pressure due to supply chain disruption, Pedro Lacerda, senior vice president at Tasc Outsourcing, told The National.
“However, the Gulf job market has remained relatively resilient overall, supported by strong government spending and ongoing economic diversification, so widespread layoffs have been limited and largely concentrated in specific businesses rather than across entire sectors," he said.
chief executive, Cooper Fitch
Alister Wellesley, chief executive of Executive Access, agreed that some industries have felt the impact more sharply – especially those in jobs tied to travel, discretionary spending and large-scale events. “Hospitality, tourism, real estate marketing, and parts of retail have seen softer demand as people delay travel and investment decisions,” he said.
However, in terms of workforce impact, “we’re not seeing broad layoffs”, he said. “It’s been more targeted – mainly operational and mid-level roles where companies can adjust quickly. In hospitality, for example, many employers are using temporary measures like unpaid leave or shorter shifts instead of permanent cuts.”
At the executive level, the market has remained relatively stable, Mr Wellesley said.
“We expect the disruption to be temporary. Many of the affected sectors are already using this period to reset – renovations, restructuring, and strategic repositioning,” he added.
Hiring and salary trends
In the first quarter of the year, the number of jobs created across the Gulf region increased by 1 per cent on a quarterly basis, according to the latest Cooper Fitch Employment Index report.
The reason for that increase was mainly due to February being the “strongest month we've had in 24 months” and January also seeing a robust increase in jobs, Trefor Murphy, chief executive and co-founder of Cooper Fitch told The National. In March, job creation dropped by about 12.5 per cent. However, he also stressed that none of the companies Cooper Fitch works with have made redundancies or cut salaries.
For now, in the Gulf, the “closer your job is linked to tourism, the worse your position is”, Mr Murphy said. “The reality is, tourists won't come back out here until there's a permanent ceasefire and, even then, they won't come back straight away. Even then, when they're thinking about coming back, they'll only be enticed back by very good deals.”
But despite near-term disruption in certain sectors, hiring demand in the Gulf remains strong, especially in areas tied to long-term national priorities such as financial services, health care and technology, which continue to hire at pace, Mr Wellesley said.
Within these sectors, demand is particularly strong for senior leadership roles, AI and data specialists, and commercial and strategy leaders, he added. “The region’s ambition to position itself as a global hub for capital and innovation is very visible in current hiring patterns.”
Mr Lacerda cited similar trends, stating there is particularly high demand for specialised roles in digital transformation, AI, cyber security, engineering, project management and healthcare professionals, “reflecting both growth priorities and persistent talent shortages”.
According to Mr Murphy, multinationals are less risk-averse and will therefore follow a more phased approach towards normal resumption of duties. But with local businesses, “the minute we see any signs of normality, we're back to normal again”, he said.
In terms of salaries, Cooper Fitch anticipated a 2 per cent to 3 per cent growth in wages this year. However, Mr Murphy believes many companies may not offer salary increases, saying it would depend on the speed of recovery.
Mr Lacerda said there have been “isolated cases of salary adjustments in more exposed sectors, particularly where businesses have faced short-term operational pressures, but these have not been widespread”.
“In most cases, any adjustments are expected to be temporary, as the region's underlying economic fundamentals remain strong and companies are cautious about talent retention amid a competitive market,” he added.
He also expects sectors facing acute talent shortages such as technology and health care to offer salary increases of between 6 per cent and 10 per cent this year. “At the same time, companies are becoming more selective, with compensation tied more closely to critical skills, experience and role impact rather than across-the-board increases.”
Mr Wellesley said industries feeling short-term pressure from the war, such as hospitality or property, can expect slower salary growth this year, “but we’re not seeing fundamental resets”.
“At the executive level, compensation remains globally competitive, with bonuses and long-term incentives still a major draw for international talent," he said.
The AI factor
The adoption of AI has boomed in the Gulf in recent years, as regional countries seek to become future-focused economies.
Workplace AI usage stands at more than 80 per cent in countries such as the UAE and Saudi Arabia, according to Stanford University’s Artificial Intelligence Index Report released this month.
However, AI adoption in the Gulf has so far been more of a “job transformer than a job reducer”, with organisations focusing on integrating the tech to enhance productivity rather than replace roles at scale, Mr Lacerda said.
“While some routine tasks are being automated, this shift is being offset by growing demand for AI-skilled professionals, data specialists, and roles focused on implementation and oversight, resulting in a net increase in opportunities for specialised talent,” he said.
Governments and large institutions are investing heavily in AI platforms, national digital programmes and data infrastructure, said Mr Wellesley.
“That’s driving strong demand for AI talent – data engineers, machine learning specialists, digital leaders and transformation executives. Over time, automation will affect some administrative roles but we’re not there yet. The bigger challenge today is the shortage of experienced AI leaders who can deliver at scale,” he added.
