As Hiring Sentiment Weakens, UAE Firms Double Down on AI Governance
Even as employers grow more cautious on hiring, companies are strengthening AI governance frameworks to improve resilience and long-term performance.
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[Image: Chetan Jha/MITSMR Middle East]
A sharp deterioration in hiring sentiment across the UAE is coinciding with a growing emphasis on AI governance and operational resilience, suggesting that organizations are banking on technology—not workforce expansion—as a source of long-term competitiveness.
A recent survey by ManpowerGroup found that the share of UAE employers planning to reduce headcount has surged to 25%, up from just 7% three months earlier. Geopolitical tensions and economic uncertainty emerged as the primary drivers behind planned workforce reductions, with smaller businesses particularly exposed. The logistics and trade sector, impacted by disruptions linked to the closure of the Strait of Hormuz, was the only major industry to report negative hiring intentions.
Yet while workforce confidence has weakened, investment in AI infrastructure and governance appears to be accelerating.
A new study released by the Dubai Future Foundation and IBM Institute for Business Value suggests that UAE organizations are moving faster than many global peers in establishing governance mechanisms to manage AI at scale. According to the report, 20% of organizations in the UAE are currently implementing AI governance platforms, compared with a global average of 12%.
The findings point to a shift in corporate priorities. During the past two years, many Gulf organizations have focused on rapidly deploying generative AI tools and experimenting with new applications. The latest research indicates that attention is now turning toward managing increasingly complex AI ecosystems, ensuring compliance, and strengthening organizational resilience.
The study, Orchestrating AI at Scale for Sovereignty and Resilience, surveyed more than 1,000 senior executives across 20 countries and 23 industries. It found that 98% of UAE executives believe sovereignty considerations must now be incorporated into business strategy, compared with 93% globally.
The emphasis on sovereignty reflects broader concerns around data control, infrastructure ownership, cybersecurity, and business continuity. As AI systems become embedded across critical business functions, organizations are facing growing pressure to maintain visibility over how AI models, data, and workflows operate across the enterprise.
“Organizations can no longer have fragmented AI systems that limit visibility, weaken control, and erode value,” said Saad Toma, General Manager of IBM Middle East and Africa. “Orchestration-led AI adoption provides the visibility, control, and coordination needed to maintain operational stability, reduce risk, and ensure AI continues to deliver value.”
Interestingly, UAE executives report slightly lower levels of concern than their international counterparts regarding AI complexity. While 52% of global respondents said they struggle to manage the complexity created by multiple AI assets, the figure stood at 48% among UAE organizations.
However, the report also highlights a concerning implementation gap. Despite growing recognition of the importance of governance, only 13% of UAE organizations currently apply comprehensive AI governance frameworks across all AI initiatives.
That disconnect mirrors a challenge increasingly facing organizations worldwide: moving beyond experimentation to generate measurable business value from AI investments. Nearly two-thirds of organizations in both the UAE (68%) and globally (67%) are expected to adopt AI systems at scale by 2030, yet many continue to struggle to translate investments into productivity gains, revenue growth, and operational efficiency.
The study argues that traditional compliance-focused governance models are proving insufficient in this environment. Instead, organizations adopting integrated, capability-driven governance approaches are better positioned to scale AI effectively and achieve stronger returns. Some report productivity gains up to six times greater than those relying on more fragmented governance structures.
Taken together, the findings suggest that the UAE’s AI agenda is entering a more mature phase. As economic uncertainty prompts organizations to reassess hiring plans and focus on efficiency, governance is emerging as a strategic capability rather than a regulatory obligation.
