Saudi Binladin Group reportedly cuts 50,000 jobs403 views
JEDDAH: Construction company Saudi Binladin Group has laid off 50,000 staff, a newspaper reported on Friday, as pressure on the industry rises amid government spending cuts to survive an era of cheap oil.
The total workforce at Binladin, one of Saudi Arabia’s biggest firms and among the Middle East’s largest builders, is around 200,000, according to its LinkedIn page.
Saudi newspaper al-Watan, citing unnamed sources, reported that the group has terminated the contracts of 50,000 workers – apparently all foreigners – and given them permanent exit visa to leave the kingdom.
The paper said the workers refused to leave the country without getting paid and some had not received wages for more than four months. They were protesting in front of the Binladin’s offices in the country almost daily, the paper added.
Binladin did not immediately reply to an email seeking comment on Friday, a day off in the Gulf region.
The company has had a series of pay disputes with workers this year. In March, scores of workers gathered outside one of the company’s office in Saudi Arabia to demand unpaid wages.
Binladin prospered during Saudi Arabia’s economic boom in the past decade, employing around 200,000 workers as it built many of the kingdom’s flagship infrastructure projects including airports, roads and skyscrapers.
But like many other Saudi construction firms, it has been hit hard in the past year as low oil prices have prompted the government to slash spending in an effort to curb a budget deficit that totaled nearly $100 billion last year.
Labor market reforms, designed to push more Saudi citizens into private sector jobs, have since 2011 made it more difficult and expensive for construction firms to hire foreign workers, pressuring the industry.
In September, the Saudi royal court said Binladin had been suspended from taking new contracts after a crane crashed at Makkah’s Grand Mosque during a dust storm, killing 107 people.
An initial government probe found Binladin had not properly secured the crane. Binladin did not issue a public statement in response to the suspension.
Binladin has been discussing how to manage its debts with banks and a few have agreed to refinance some debt through steps such as extending maturities, with some providing short-term financing for the company’s working capital including staff wages, banking sources had said.
News Source Reuters