By Anil Bhoyrul
Substantial job cuts in 2009 lessen the need to take further action - panelists.
No need to hide how the panel voted this month, with all nine of our experts saying they did not plan job cuts in 2010.
] Most of the panel were clear that while they did not personally see the need for cuts, the worse was far from over. Many of them stated that they had already made substantial job cuts in 2009, and that was the only reason no more were planned in 2010.
Pressed further, some of the panel admitted that most of their competitors were likely to make “some cuts”, most probably at the end of Q1.
“I think what is happening in Q1 is the key. At this stage I would say no, no more job cuts, but I may reverse that view by the end of Q1 depending on the revenues,” said one panelist.
There was also an admission by three members of the panel that they “over cut” last year in order to get rid of so-called “trouble makers.”
“It’s no secret some of us did that. In my organization we lost over 100 people but looking back, I think maybe only 80 of those had to go. The rest, well it was a good time to see the back of them. Now, especially in this market, I can start recruiting better people into those positions, and to be honest, probably on lower salaries,” said one panelist.
Just two members of our panel went as far as to say they would start recruiting again this year, though another three said it was “possible” by Q4.
“There is a wait and see game going on, especially in recruitment, because nobody can really predict what is happening this year. Will it be worse than 2009? I think not, but there is the fear that because less revenues were generated in 2009, this is the year when we will suffer more,” added another panelist.
The official figures from various reports published last week don’t give much comfort. Shuaa Capital said last week it that the Dubai economy would contract by 0.4 percent year-on-year in 2010, following on from a five percent yearly contraction seen last year.
The ‘UAE Vision 2010’ report said this was mainly due to the downturn in the emirate’s construction industy and real estate sector, which last year saw prices decline from their peak by as much as much as 60 percent, the report added.
Shuaa said it expected the UAE economy as a whole to emerge from recession this year and its GDP is forecast to grow 2.5 percent, a turnaround from the 3.5 percent year-on-year contraction recorded by the bank in 2009.
Meanwhile, consumer confidence in the UAE has fallen for the first time since March last year, according to the latest results of the Consumer Confidence Index have revealed last week. The quarterly survey conducted by the Middle Eastern job site Bayt.com in conjunction with research specialists YouGov Siraj, found the UAE had moved down the index by 4.8 points.
Other countries in the Middle East and North Africa (MENA) region which also saw a decline were Morocco, with the largest drop of 5 index point, Kuwait, Syria and Qatar.
Levels of confidence among Gulf business people also declined slightly in the fourth quarter of 2009, although Kuwait and Saudi Arabia bucked the trend, according to a new report published by HSBC last week.
The UAE, Oman and Bahrain business confidence levels all declined in the last quarter, HSBC's quarterly Gulf Business Confidence Index revealed. The index fell from 81.4 to 80.2 between the third and fourth quarters of 2009.
And since the new year, many of the leading banks have cut their growth forecasts for 2010 in the UAE to around 3 percent from 5 percent.