UAE Job Market 2026: Growth and Changes

UAE Labor Market in 2026: Expansion, Layoffs, and Sectoral Reorganization

The dynamics of the Middle Eastern labor market are reaching a new level in the coming years. According to a recent survey, nearly half of the companies operating in the United Arab Emirates – precisely 48 percent – plan to hire new employees by 2026, while one in three employers is considering workforce reductions. The findings reflect the transformation of the economy, as well as adaptation to structural and market challenges.

Economic growth drives labor demand

The UAE's economy has been characterized by strong expansion in recent years, and this trend is expected to continue into 2026. According to the Central Bank's forecast, real GDP could grow by 4.9 percent in 2025 and by 5.3 percent in 2026. The driving force is not only the oil sector but also the strengthening of so-called non-oil activities – everything not directly related to hydrocarbons. Non-oil GDP may show a growth of 4.8 percent in 2026, while the oil industry is expected to grow by 6.5 percent following updates to OPEC+ production guidelines.

This macroeconomic momentum directly impacts the labor market: some companies are expanding their teams, especially in sectors where infrastructure investments play a prominent role.

Focus on Dubai: metro, roads, new airport

Looking ahead, Dubai is considered a particularly promising labor market. Along with population growth, there is an increasing need to expand transportation and urban infrastructure. Planned projects include the development of the metro network, widening of road networks, and the construction of a new international airport – as the capacity of the existing terminal is reaching its limit. These investments generate significant demand for labor in construction, engineering, logistics, and related services.

Sectors: where is the largest growth expected?

According to the survey, the aerospace, defense, and space industries are among the sectors preparing for the largest expansion. Nearly half of the respondents in these sectors plan double-digit workforce growth. The public sector is also gearing up for active recruitment, especially in transformation programs and digital projects.

However, the real estate and construction sectors present a mixed picture: while some companies are preparing for large-scale hiring, others want to reduce staff due to project cycles. The latter is particularly observed in companies where certain major projects are completed, and they await new contracts.

Conversely, stagnation is felt in the consulting and financial services sector: significant staff changes are less likely here, indicating stabilization of the market.

Layoffs and unchanged staff – the other side

While positive forecasts dominate, it's important to note that 29 percent of companies plan workforce reductions. This is not necessarily a crisis symptom; rather, it demonstrates a drive for cost efficiency and organizational transformation. An additional 23 percent do not plan any changes, opting to maintain stable numbers.

This balanced state is an important indicator: although the economy is growing, most companies continue to manage their human resource strategy cautiously and consciously.

Are there enough talents in the country?

Another important question in the labor market is the quality and quantity of available professionals. 67 percent of respondents believe there is enough talent in the UAE to fill positions in the next 12 months. However, nearly 20 percent say otherwise, and 14 percent are unsure.

There is even more skepticism at the management levels: half of senior executives do not feel assured of the availability of qualified professionals, while 40 percent believe the current market cannot meet their needs. This is especially true for positions requiring specialized expertise, digital transformation skills, or sector experience.

Population growth and competition

The UAE's population has grown by nearly two million in the past five years, reaching 11.48 million by 2025. This growth impacts not only housing and public services but also the structure of the labor market. Competition for positions is intensifying, especially for mid-upper and upper-level positions.

Summary

The year 2026 for the UAE labor market is about balancing: on one hand, continued economic growth, infrastructure investments, and sector expansions; on the other hand, caution reflected in layoffs and stabilization of workforce numbers. The competition for talent intensifies, particularly in the Dubai area, where the largest investments are expected. Companies need to rethink their recruitment strategies, workforce experience, salary policies, and training opportunities to remain attractive to top professionals.

(Source of the article: New survey by Cooper Fitch.)