KSA’s Binladin Group cuts thousands of jobs and slashes salaries due to COVID-19 crisis
Reuters report says thousands of staff have been let go or sent on unpaid leave
Saudi Arabia’s Binladin Group has cut thousands of jobs and reduced staff salaries by between 30% to 70% as the coronavirus outbreak hurts business of the Kingdom’s biggest construction company.
According to a Reuters report, citing three sources familiar with the matter, thousands of staff have been let go or sent on unpaid leave, especially those who were working on open-air construction sites, and in places where work has been hindered by the coronavirus outbreak.
The three sources, who declined to be identified, added that the company has enforced salary cuts of between 30% to 70%, while also cancelling other allowances like transportation, in an effort to reduce costs.
Binladin Group is regarded as being a dominant force in the Saudi construction sector and is central to the country’s plans to develop tourism and infrastructure projects that will help diversify the economy away from oil revenues by 2030.
These plans are now at risk from an economic downturn caused by the global outbreak of COVID-19, coupled with low oil prices that have forced the government to reduce spending and increase borrowing.
The news comes in the wake of reports earlier this month about the construction giant looking for an advisor to cut costs and restructure debt for a Mecca skyscraper complex. This move is part of efforts to restructure the group, after the government took a 35% from Binladin family members that were swept up in an anti-graft campaign launched by Riyadh in 2017.
Binladin completed the $15 billion, government owned Abraj Al Beit golden clocktower complex in 2011. The development consists of seven towers of hotels and malls, and is situated near the Grand Mosque in Mecca, the holy city visited by millions of Muslim pilgrims every year.
The 603-metre clocktower is the landmark feature of the complex, which was built to modernise the city and provide accommodation and other facilities for pilgrims.
According to a document seen by Reuters, Binladin has been seeking proposals from advisers, ‘on behalf of the shareholders in the Abraj Al Bait Complex’, to review its operational and financial performance and to assess financial restructuring options.
