GCC hiring fell 3 per cent quarter on quarter in Q2 2026, reversing the 1 per cent growth recorded during the first three months of the year, according to the Cooper Fitch Gulf Employment Index.
The UAE and Kuwait each recorded declines of 4 per cent, Bahrain fell 2 per cent and Qatar contracted 6 per cent. Saudi Arabia and Oman each recorded growth of 1 per cent.
The report said organisations delayed decisions at the start of the quarter as they waited for more clarity. By June, disruption, costs and limits on business visibility had increased the requirements for approving roles.
Recruitment continued, but employers focused on positions linked to projects, revenue protection, financial controls, compliance and business continuity. Hiring linked to team expansion slowed, particularly in markets affected by private-sector conditions, trade routes and approval cycles.
“Q2 may prove to be a turning point in GCC hiring,” the report said, adding that the decline showed that the effects of disruption had moved from delayed decisions into lower recruitment demand.
UAE employment falls 4% as business activity slows
Hiring in the UAE fell 4 per cent in Q2 as disruption affected spending, supply chains and company approvals.
The country recorded its first contraction in private-sector employment in more than four years, with staffing levels falling at the fastest rate since August 2020, according to the index.
The UAE Purchasing Managers’ Index fell to 50.8 in June, its lowest level in more than five years, as business conditions and employment momentum slowed.
The Central Bank of the UAE raised its inflation forecast for 2026 to 2.3 per cent because of supply pressures linked to developments in the region.
Recruitment continued in finance, compliance and roles linked to project delivery, while hiring across commercial departments slowed.
Saudi Arabia and Oman record 1% hiring growth
Saudi Arabia recorded hiring growth of 1 per cent, supported by investment within the country and the delivery of government-backed diversification programmes.
Its PMI rose to 53.3, with support from demand within the country and government-led activity outside the oil sector. Non-oil activity had been the largest contributor to Saudi economic growth in Q1.
Vision 2030 programmes continued to direct activity into infrastructure, industry, logistics and private-sector development during the second quarter.
Recruitment continued in transformation, industrial development, regulatory change and project delivery. Companies dependent on exports remained under pressure.
Hiring in Saudi Arabia was also affected by Saudisation requirements, industrial development and activity in mineral exploration and extraction.
Oman recorded growth of 1 per cent. The report linked this to the ports of Sohar, Duqm and Salalah, which provided access to shipping routes outside the Strait of Hormuz. This supported employment in operations, engineering and supply-chain functions, although transport costs and inflation restricted hiring in other areas.
Qatar records 6% decline in employment activity
Qatar recorded a 6 per cent fall, exceeding the declines in the other GCC markets covered by the index.
The report connected the result to the country’s dependence on energy exports, trade and Gulf shipping routes. Lower new orders and client activity reduced demand for team expansion.
Recruitment continued in operational and regulated roles. This included positions linked to sustainability-reporting requirements introduced for banks and insurers from 2026, but the activity did not offset the fall in private-sector demand.
Kuwait recorded a 4 per cent decline as conditions in the non-oil private sector weakened. Its PMI fell to 46.4 in June and remained below 50 for a fourth month. New orders, output and employment continued to contract.
Recruitment centred on controls, procurement and operational positions, with employers limiting spending on expansion.
Bahrain recorded a decline of 2 per cent. Salary support provided through the Unemployment Insurance Fund helped maintain employment for eligible Bahraini workers during April. Hiring focused on maintaining business functions rather than adding teams.
Investment management, mining and finance lead sector hiring
Investment management recorded growth of 6 per cent, supported by expansion in the UAE’s financial centres.
Abu Dhabi Global Market reported increases in assets under management, licences, its workforce and the number of asset managers. Dubai International Financial Centre added wealth and asset-management firms.
Recruitment came from fund activity, investment platforms and demand for investment professionals.
The sector chart lists mining growth at 6 per cent. However, the report’s written sector analysis and key highlights state that mining increased 5 per cent.
Mining recruitment was supported by exploration licensing rounds and development of Saudi Arabia’s mineral sector under Vision 2030. Employers recruited for geology, engineering, metallurgy and project-delivery positions as projects progressed through tendering, licensing and exploration.
Finance hiring increased 5 per cent, while senior finance rose 2 per cent.
Demand centred on finance transformation, regulatory reporting, cost control and financial planning and analysis. In Saudi Arabia, IFRS 17 and insurance-sector regulation supported recruitment in finance reporting and control. Appointments at senior level progressed at a lower rate.
Data and AI hiring rises while cloud and software decline
Data and artificial intelligence hiring rose 4 per cent, driven by AI strategies, government programmes and adoption by companies.
Demand centred on AI capability, data strategy and platforms linked to business operations.
Cloud recruitment declined 4 per cent as employers became more selective about infrastructure positions.
Software hiring fell 6 per cent, reversing gains recorded in Q1. Investment continued across AI, cloud systems and digital transformation, but companies focused on platforms required for operations and returns from technology investment.
Cybersecurity hiring increased 2 per cent, supported by compliance requirements, operational resilience and cyber risk in regulated industries.
Recruitment included identity and access management, security testing and infrastructure security. The supply of people with specialist experience remained limited.
Compliance and manufacturing recruitment rises 2%
Governance, risk and compliance hiring increased 2 per cent as financial institutions and fintech companies expanded anti-money laundering, counter-terrorist financing, governance, risk and regulatory-reporting functions.
Requirements under the Virtual Assets Regulatory Authority, Dubai Financial Services Authority, Saudi Central Bank and Saudi Capital Market Authority supported compliance recruitment.
Companies also sought to strengthen controls and reduce dependence on outsourced services.
Manufacturing hiring rose 2 per cent. Recruitment centred on production engineering, quality, procurement and cost control.
Industrial expansion in Saudi Arabia, Saudisation in engineering and procurement-localisation requirements supported demand. Export conditions, costs and supply-chain disruption limited team expansion.
Real estate hiring increased 2 per cent, supported by project handovers in the UAE and development activity in Saudi Arabia.
Saudisation rules covering sales and marketing in the private sector increased demand for Saudi nationals in commercial and client-facing real estate positions.
The report said the rate of growth indicated capital deployment rather than an increase across the whole market.
Banking and strategy hiring remains unchanged
Banking hiring was unchanged at zero per cent despite lending activity in GCC markets. Recruitment focused on liquidity management, margins, credit and risk assessment, regulatory compliance and balance-sheet management.
Risk, compliance and control positions recorded activity, while recruitment in relationship management, products and revenue remained linked to balance-sheet targets.
Strategy hiring was also unchanged. Organisations moved from transformation planning towards implementation.
Work continued across AI, transactions and diversification programmes. Recruitment focused on project delivery, operating models and capability within companies, while searches for senior strategy appointments were affected by planning and approval processes.
CEO and board recruitment remained unchanged as appointments progressed through succession, governance and approval cycles.
Governance reform, AI oversight and risk management continued to create requirements at board level. Search activity depended on board schedules, company performance and approvals.
Public-sector, sales and marketing recruitment contracts
Public-sector hiring fell 5 per cent. The report said Saudi Arabia froze spending classed as discretionary and paused contract approvals as defence costs rose and fiscal deficits increased.
Infrastructure, localisation and transformation programmes continued across the GCC, but recruitment slowed as budgets were redirected and project schedules moved into the second half of the year.
Sales and marketing hiring fell 6 per cent as business momentum and uncertainty reduced recruitment for client-facing positions. Employers prioritised roles linked to revenue, while recruitment across other sales and marketing functions became more selective.
Human resources hiring declined 1 per cent after growth in Q1. Activity continued in senior HR, organisational development and workforce localisation, supported by Saudisation, Emiratisation and transformation programmes. Recruitment for tactical positions became more selective.
Legal hiring fell 2 per cent as companies limited permanent headcount. Regulation and transaction activity continued to generate work, but employers used smaller teams, external legal advisers, managed services and legal technology.
Supply-chain hiring declined 2 per cent as companies shifted from transaction-based logistics recruitment towards planning, resilience and risk management.
Disruption in the Red Sea, longer routes and costs supported demand for network redesign and disruption management, while recruitment linked to shipping volumes slowed.
Trade, travel and financing pressures affect employment
The report cited conflict in the region and what it described as the effective closure of the Strait of Hormuz among the factors affecting the employment market.
It also cited an International Monetary Fund forecast of 3.1 per cent global growth in 2026.
The World Trade Organisation expected combined trade in goods and services to grow 2.7 per cent in 2026, compared with about 4.7 per cent in 2025. This affected the outlook for GCC exporters and companies dependent on demand from other markets.
Tariff uncertainty, investment decisions and US interest rates also affected financing and expansion. The US Federal Reserve maintained its target rate at between 3.5 and 3.75 per cent during the quarter.
Energy, freight and commodity costs placed pressure on aviation, logistics, manufacturing and sectors dependent on imports.
The report cited International Air Transport Association data showing passenger demand among Middle East airlines fell 46.6 per cent year on year in April and remained 28.4 per cent lower in May.
Air cargo demand among Middle East carriers fell 8.9 per cent in May, affecting tourism, hospitality, logistics and companies dependent on customers, trade and workers from outside the region.
GCC hiring records first quarterly decline in index chart
The report’s quarter-on-quarter chart shows job opportunities increasing 6.5 per cent in Q3 2024, 2 per cent in Q4 2024 and 1.5 per cent in Q1 2025.
Growth stood at 1 per cent in Q2 2025, 1.3 per cent in Q3 2025 and 2.6 per cent in Q4 2025. It then slowed to 1 per cent in Q1 2026 before falling 3 per cent in Q2.
The World Bank cut its forecast for GCC economic growth in 2026 from 4.4 per cent to 1.3 per cent, according to the report, which attributed the revision to the economic effects of the conflict.
Government programmes, investment commitments and demand within GCC countries continued to support employment, but did not produce growth across the employment market.
The report said the outlook for the second half would depend on whether the contraction was temporary.
An improvement in trade, travel and business visibility could result in companies releasing jobs placed on hold during Q2. Continued disruption could affect vacancies, project schedules, workforce planning and decisions on replacing or adding employees.
