50,000 Jobs Reportedly Cut by Saudi Builder Binladin as Government Cuts Bite

As pressure on the industry rises amid government spending cuts to survive an era of cheap oil, construction company Saudi Binladin Group has laid off 50,000 staff, a newspaper reported on Friday.

According to its LinkedIn page there are more than 200,000, people working in the Binladin which is one of Saudi Arabia’s biggest firms and among the Middle East’s largest builders.

The group has terminated the contracts of 50,000 workers – apparently all foreigners – and given them permanent exit visa to leave the kingdom the Saudi newspaper al-Watan reported citing unnamed sources.

Some of the workers had not received wages for more than four months and the workers refused to leave the country without getting paid, the paper said. The paper added that the disgruntled workers were protesting in front of the Binladin’s offices in the country almost daily.

There has been a series of pay disputes between the company and the workers this year. In demand of unpaid wages, scores of workers gathered outside one of the company’s office in Saudi Arabia in March this year.

Employing around 200,000 workers as it built many of the kingdom’s flagship infrastructure projects including airports, roads and skyscrapers, Binladin prospered during Saudi Arabia’s economic boom in the past decade.

However 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, like many other Saudi construction firms, ghis company too has been hit hard in the past year.

Since 2011 it has been more difficult and expensive for construction firms to hire foreign workers, pressuring the industry, as the labor market reforms, designed to push more Saudi citizens into private sector jobs, have chocked the liberty to employ foreign workers at will.

After a crane toppled into Mecca’s Grand Mosque during a dust storm, killing 107 people, in September the Saudi royal court said Binladin had been suspended from taking new contracts.

The crae that killed the scores of pilgrims had not been properly secured by Binladin, an initial government probe found. Binladin did not issue a public statement in response to the suspension.

Through steps such as extending maturities, with some providing short-term financing for the company’s working capital including staff wages a few of the banks have agreed to refinance some debt even as Binladin has been discussing how to manage its debts with banks, banking sources had said.

The father of the late al Qaeda leader Osama bin Laden had founded the Saudi Binladen Group in the 1930s. One of the father’s over 50 children, the Islamist radical was removed as a shareholder in the business in 1993 and disowned by the family.

(Adapted from CNBC)

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