Layoffs are falling in 2017, and these sectors are hiring again

2016 was the year of massive redundancies across the Gulf region. The collapse in oil prices took a toll on almost every corporate bellwether, forcing them to slash jobs and restructure. 

Is this going to continue in 2017? According to a survey by recruitment firm GulfTalent, the Gulf region is finally set to see a reduction in job cuts and a moderate rate of new job creation.  

Manufacturers reported the most positive outlook, with 58 per cent of firms planning to grow staff numbers in 2017. Healthcare companies, including hospitals, reported the second highest rate of jobs growth, with 55 per cent of firms planning headcount expansion. 

The survey, which involved more than 800 employers across the GCC, showed that the number of companies slashing their headcounts is set to drop drastically, from 40 per cent of survey respondents in 2016 to 23 per cent in 2017.

More firms are planning to expand their workforce, increasing from 41 per cent last year to 47 per cent this year. Some surveyed companies cited streamlined regulations, strong logistics networks and proximity to export markets as factors contributing to their growth. 

Banks are also expecting a relatively positive year, with 44 per cent planning some increase in headcount. Only 8 per cent of surveyed banks plan to cut staff this year, in sharp contrast to 38 per cent who reported cuts in 2016. 

HOWEVER, SAUDI ARABIA IS AN EXCEPTION TO THE TREND DUE TO ITS HIGHER DEPENDENCE ON OIL REVENUES. 

The survey estimates that the country will still be hit hard, with 45 per cent of participating firms expecting headcount reductions in 2017, compared with just 15 per cent of firms in the UAE. 

This is consistent with the IMF’s findings, which recently revised its GDP growth outlook for Saudi Arabia from 2 per cent to 0.4 per cent. However, the oil-rich kingdom’s ambitious economic reform drive, the National Transformation Programme, aims to significantly reduce the country’s dependence on oil over the coming years, the GulfTalent report said. 

The oil and gas sector, which has been battered by two years of low oil prices, continues to downsize. However, the pace has moderated, with only a third of firms planning job cuts in 2017, compared with almost half in 2016. 

Construction remains among the region’s worst-performing sectors, according to GulfTalent’s survey. Of the construction firms who participated in the survey, 45 per cent reported plans to cut staff numbers this year, which is only marginally better than the 55 per cent who reported having cut jobs in 2016.