Published on 3rd March 2026
WEC is closely following the situation unfolding in the Middle East, and our thoughts are with all those in the region and affected by the violence
The staffing sector is currently absorbing a direct shock from the escalation of events related to the Iran conflict. While the impact remains uneven across markets, we anticipate a slowdown in sector growth during Q2 2026, driven by heightened geopolitical risk, cautious client sentiment, and delayed hiring decisions. At this stage, we are not observing a structural withdrawal from the region; however, decision cycles have clearly lengthened, particularly in oil, energy, logistics, and cross-border infrastructure projects. If the conflict extends beyond one month, we expect companies to temporarily suspend new hiring requests and operate at minimum workforce capacity until stability returns. In such a scenario, cost-containment strategies could lead to workforce reductions of up to 15%, particularly among firms operating in the Gulf region where exposure to energy markets and foreign investment flows is significant. While these measures would reflect short-term defensive adjustments rather than structural contraction, the duration of the conflict remains the decisive factor shaping labour market resilience across the Middle East.
