Nearly half of businesses in New Zealand and Australia are axing employees or freezing staffing levels - three times more than eight months ago - on expectations that business conditions will worsen.
The global consultancy Hay Group conducted a worldwide survey of pay and staffing at more than 2,500 organisations in November.
It found that 17% of organisations in Australasia are decreasing staff numbers, and 27% are freezing them.
Twenty-seven per cent expect business results to be significantly worse than targeted levels, compared to 7% in March.
The global survey found that Africa and the Middle East have been the least affected by the economic downturn.
Nonetheless, 64% of local organisations expect results close to targeted levels in 2008.
The global survey found that Africa and the Middle East have been the least affected by the economic downturn, with only 9% of African companies and 12% of Middle Eastern companies reporting business results significantly below target.
Local results were in line with the overall global trend.
The oil and gas sectors had weathered the downturn better than other industries, with 19% of respondents expecting business results significantly better than targeted.
The retail sector was one of the hardest-hit sectors globally, with 63% of respondents expecting poor business results due to lower consumer spending and tighter credit markets.
The survey also found that organisations were concerned about retaining top talent and critical skills, maintaining and affording competitive pay, and maintaining employee motivation.
Fifty-three per cent of local respondents were changing or considering changing their budgets for base salary increase for 2009, with 24% freezing or considering freezing salaries for all employees.