By Daniel Shane
UAE and Saudi Arabia have applied most stringent cuts, although 1/3 of GCC firms say they will focus on cost cutting in future
A significant proportion of companies in the GCC were forced to implement stringent cost-cutting measures in the wake of the economic downturn, according to the findings of a new study by McGill Consulting Group.
In the UAE, for example, 34 percent of businesses have been forced to chop between 11 percent and 20 percent of their overall budget in the last three years.
In Saudi Arabia, it was a different story however, with 38 percent of survey firms saying they had cut less than five percent of costs.
In Qatar and Kuwait, 69 percent and 73 percent, respectively, claimed that since the recession they had trimmed their operating expenses by less than five percent.
In Bahrain though, just under half of companies surveyed indicated that they have cut over 50 percent of their annual budgets.
However, the study also showed that more than half of companies (58 percent) in the Gulf region say they did not cut costs at all during the past three years despite the impact of the global economic downturn.
Still, a third of companies in the region intend to engage in cost cutting in the near future.
The study said legal departments were the least hit by cuts, accounting for an average of two percent in the GCC, largely driven by mounting legal issues stemming from poor payment and supplier performance.
The hardest hit, it added, was taken by human resources departments, followed by marketing, sales, and logistics.
In terms of country-specific data, the lowest cuts in human resources were in Saudi Arabia, Oman and Kuwait while the highest cuts were in the UAE and Bahrain.