Hiring in the UAE rose by just 1.25% in 1Q 2025 compared to the previous quarter, as most companies chose to pause recruitment and work with existing teams, Cooper Fitch CEO Trefor Murphy said in a Dubai Eye interview (watch, runtime: 7:21). This figure was still decent despite being “a slightly weaker number,” he said.

Rising pressures on profitability have caused businesses to prioritize cost efficiency and internal restructuring over headcount growth, according to a recent Cooper Fitch report that was picked up by The National. The recently introduced corporate tax, soaring commercial rents, service fees, and higher salary expectations driven by inflation have all narrowed margins.

By the sector: While sectors like consulting, manufacturing, HR, and supply chains saw a slight reduction in hiring, recruitment was still strong in the private legal services, trade, real estate, tech, AI, and digital sectors. Firms are also focused on AI to improve company efficiency and boost bottom lines, Murphy said, though he stopped short of saying AI had started to replace people in jobs.

People don’t seem to be dissuaded: Job growth is likely not enough to cater to the UAE’s growing population, Murphy said, highlighting an oversupply of people looking to come to Dubai and the UAE. Bleak prospects aren’t a setback though, with many people still coming to the country despite having no employment secured, Murphy said.

Regionally, Saudi Arabia posted the strongest hiring growth in the Gulf, with job activity rising 3.5% in 1Q 2025. Across the wider GCC, hiring activity rose 1.5% — Qatar saw an uptick, Kuwait’s job market remained flat, whilst Oman and Bahrain recorded dips.

Could tariffs and global headwinds make things worse? Oil exports being exempt will help keep disruption minimal, however industries tied to US-bound exports — such as aluminum and petrochemicals — are rethinking hiring and production plans, the report said. A further escalation of tensions impacting oil demand, investor sentiment, and trade routes could eventually weigh on hiring, especially in energy and logistics.

On the other hand, these global shifts could boost intra-GCC initiatives and domestic production in sectors like logistics, advanced manufacturing, and food production, Cooper Fitch notes.

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