Saudi Binladin slashes jobs, trims pay as Covid crisis bites
JEDDAH, May 20, 2020
Saudi Arabia's biggest construction firm Binladin Group cut jobs and reduced staff salaries as it navigates the fallout of the coronavirus pandemic, reported Bloomberg.
The Jeddah-based conglomerate put thousands of employees on indefinite, unpaid leave as it weighs options to lower costs by as much as 50%, according to people with knowledge of the matter.
The group reduced pay by about a third during Ramadan to reflect shorter working hours, which impacted about half of its 100,000 employees, according to the report.
The company, which is restructuring an estimated $15 billion of debt, has already started laying off staff, including senior managers, and more jobs will be cut, the people said, asking not to be identified due to the sensitivity of the matter.
Saudi Arabia’s economy is being battered by a 50% slump in crude prices this year and from lockdown measures to prevent the spread of Covid-19. Faced with the prospect of ballooning deficits, the government has tripled valued-added tax, cut allowances for state employees and tapped its foreign reserves, it stated.
It’s also slashed spending on some large-scale projects, depriving Binladin -- for decades the go-to developer for mega-projects -- from its main source of revenue.
Earlier this month, the government allowed private-sector companies to cut salaries by as much as 40% for up to six months, while giving employers more rights to terminate contracts, stated the Bloomberg report.
Even before this year’s crisis, Binladin was still reeling from the oil-price slump in 2015, which forced the company to cut more than 50,000 jobs in 2016, it added.
