Dubai is experiencing significant economic challenges amid ongoing conflict in the Persian Gulf, with many migrant workers facing job losses, salary reductions, and heightened financial insecurity. The situation has deteriorated since the onset of hostilities involving the United States, Israel, and Iran earlier this year.

The war has had a pronounced impact on Dubai, the United Arab Emirates’ largest city, which serves as a regional hub for tourism, aviation, and international business. Located approximately 90 miles across the Gulf from Iran, Dubai has been one of the countries most directly affected by retaliatory missile and drone attacks launched from Iran. These strikes, which have caused casualties and damage, have led to a downturn in economic activity as visitors avoid the city and some affluent residents choose to leave.

For decades, Dubai’s rapid growth has relied on a vast migrant workforce, which now constitutes about 90 percent of its population. Many of these workers come from South Asia, Africa, and the Philippines and fill roles primarily in construction, domestic work, hospitality, and retail sectors. Since the conflict began, numerous foreign workers report losing employment, being furloughed, or experiencing pay cuts.

Joy Vivanda, a 44-year-old domestic worker from the Philippines, lost her job in March when the family she served left abruptly. Efforts to find new work have been fruitless despite daily searches around the city. Similarly, Mujeeb Rahman, an Indian accountant formerly employed by a catering company, said he and his colleagues were laid off due to declining sales. “Many companies are not hiring anymore,” he noted, underscoring the broader labor market contraction.

A recent survey conducted by recruitment firm ManpowerGroup revealed that roughly 25 percent of employers in the Emirates plan to cut jobs in the third quarter of this year, while around one-third have no hiring plans. Some employees who have retained their positions say their incomes have been significantly reduced, with salary structures shifted to performance-based commissions amid weak consumer demand.

Dubai’s government has responded with economic stimulus packages totaling over $680 million to support businesses during the crisis. Officials and business leaders remain cautiously optimistic. Khalid Jassim Mohamed bin Kalban, CEO of Dubai Investments, highlighted the city’s historical resilience and financial strength, pointing out the absence of widespread business closures or an exodus of residents.

Nonetheless, the human toll is evident for many migrant workers who send remittances to support families back home. Venkatt, an Indian hotel housekeeper dismissed and repatriated in April, expressed deep concerns about his family’s future without the income he previously provided.

While a cease-fire framework was agreed upon last month between the United States and Iran, tensions remain high, and the potential for renewed conflict looms. Economic recovery in Dubai will likely hinge on the stability of the broader region and the gradual restoration of business confidence.