Saudi Binladin Group to cut 15,000 jobs
Construction company Saudi Binladin Group plans to cut about 15,000 staff which represents a fraction of the group’s workforce according to its LinkedIn page
Construction company Saudi Binladin Group plans to cut about 15,000 staff, people with knowledge on the matter told Reuters.
The possible layoffs at Binladin, also reported by local news site “Sabq”, would represent a fraction of the group's total workforce, which is around 200,000, according to its LinkedIn page.
Binladin did not reply to repeated calls and emails from Reuters seeking comment to its offices in Riyadh, Jeddah and Dubai. However, the news agency says the planned cut-backs are an example of the choices which companies are having to make as Saudi Arabia's economic boom loses steam.
"The Saudi construction sector is definitely soft. There's general uncertainty and it's very difficult to plan where to focus on" because companies are not sure which projects will go ahead, said one source who works in the industry, declining to be named because of the sensitivity of the matter.
Some of the 15,000 workers will be laid off immediately, while others will be transferred temporarily to work on a multi-billion dollar airport project in Jeddah, another source said.
Labour 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 Binladin Groupd was suspended from taking new contracts after a crane toppled into 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.
However, according to Reuters, the biggest long-term challenge for the business of Binladin and other Saudi construction firms, however, may be government spending curbs in an era of cheap oil.
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