Middle East Businesses Outline Recovery Plans Following Re-openings

Published June 10th, 2020 - 01:30 GMT
Middle East Businesses Outline Recovery Plans Following Reopenings
Mesaures are being carefully drafted to balance both businesses reseilence and employees' best interest. (Shutterstock: Plamen Galabov)

As most Middle Eastern countries maneuver their first weeks of easing restrictions imposed following the Coronavirus outbreak, major businesses are reporting recovery plans with temporary, yet extreme measures that aim to ensure a quick recovery and maximum containment of financial damage.

As companies continue to assess the economic consequences expected to affect their businesses as a result of almost two months of complete closures, mandated by government's attempts to control the spread of COVID-19, strategic measures are being carefully considered and drafted, trying to balance both businesses' resilience and employees' best interest.

In a report released amid the pandemic, the International Organization of Labour expected that 4 out of 5 individuals in the global workforce are expected to suffer partial or full consequences of the economic crisis.

According to a survey conducted by Mercer’s earlier this month, around 81% of GCC local companies have already designed plans to adjust their compensation and benefits programs following the COVID-19 crisis. The study adds that 90% of businesses affected by the pandemic are in the engineering, construction, and real estate sectors.

The study notes that most businesses are trying to protect the income made by their lower-levels workers. 27% of these businesses indicated 15% - 25% temporary salary reductions, mostly expected to continue over the next three months, while 15% are considering allowance reductions. 73% of companies surveyed reported taking the decision of suspending 2020 salary increases.

36% of affected businesses are considering terminations and hiring freezes, while 17% have changes in leaves' policies.

In efforts to cope with the post-Coronavirus crisis, Dubai-based Chalhoub Group specialized in luxury goods announced plans to cut costs. Managing about 300 brands and 750 retail outlets across the Middle East, Chalhoub Group will be focusing on restructuring and preserving cash.

Additionally, the company is considering laying off 10% of its 1200 workforce. The group will also ask its employees to take voluntary salary cuts that are not expected to last more than six months, as per plan.

Headcount corrections are expected to recommend cutting 10% - 15% of jobs in the financial sector in the UAE, several banks have anticipated.

With the aviation sector being amongst the worst-hit worldwide, Emirati airline carriers, who announced salary cuts early during the crisis, have also announced extending cuts until the end of September.

Last April, both Emirates airlines and Etihad Airways had taken the decision to reduce wages by 25% to 50% for three months. A month later, Bloomberg reported Emirates' plans to lay off about 30K employees of its giant staff, in order for the group to survive the 2020 hit.

Yesterday, local Emirati media reported what has been described as a "massive" layoff by state-owned Emirates airlines, where 700 cabin crews' members and 600 pilots were let go. The UAE-based airline released a statement describing the move as "the significant impact that the pandemic has had on the business."
The statement added that "we simply cannot sustain excess resources and have to right-size our workforce in line with our reduced operations."

Feeling the impact of long lockdowns, popular car-hailing app Careem let go of 31% of its workers, in addition to suspending its bus services.

Careem's owner company, Uber, has also suspended its Uber Eat service in several Middle Eastern countries, including Saudi Arabia and Egypt.


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