Saudi Binladin Group reportedly set for job cuts, name change
A restructuring activity led by a government-appointed committee is said to be under way at the contracting giant
A restructuring activity that will see job cuts is reportedly under way at Saudi Binladin Group.
The contractor will be "slimmed down and renamed" following the construction giant's management reportedly being taken over by the kingdom's government.
A report by Reuters states that the moves will be the first "in a broad restructuring planned for Saudi Arabia’s biggest builder" as the government takes a stake worth at least 35% in the company.
According to the report, the company is currently being managed by a government-appointed committee of five members, who have been assigned to "oversee the shake-up".
"Hundreds of layoffs" are expected to take place due to the restructuring, which is hoped to help streamline operations at the company.
Reuters said that 750 staff were "recently given one-month notice, and would receive their financial rights in full".
Most of the job cuts are said to be related to employees working on Jeddah's King Abdulaziz International Airport scheme, which is reportedly "almost finished, although delayed beyond the initial 1 May, 2018 completion date".
A new holding company could be formed with a new name as part of the exercise, the report added.
One of the sources cited by Reuters said the company's 537 business units would be "rationalised, which could include them being sold off, wound down or merged".
Citing the source, the Reuters report continued: "The remaining units will be placed under the new structure.
"Among the units expected to remain under the new holding company will be a contractor that will retain the Saudi Binladin name as well as [its] operational maintenance, real estate, energy, and advanced technology and business investments."
Reuters' report follows a denial of government takeover by the contractor, made this January.
In a statement posted on its website at the time, Saudi Binladin Group said it "remains a private-sector company owned by its shareholders".
The statement continued: "[We] can also confirm that contracted work with the government, which remains a large part of our activities [is] ongoing.
"This includes the projects currently operating in the two holy mosques, and the rehabilitation project of Zamzam, which began months ago and is expected to end before Ramadan 1439 H [Ramadan 2018]."
The statement confirmed that select shares had been transferred to the government to offset its outstanding dues: "Based on information available to management, some of the shareholders may have agreed a settlement that involves transferring some [Saudi Binladin Group] shares to the goverment of Saudi Arabia against outstanding dues.
"[The company] sees this as a positive step and is currently restructuring its governance and executive management team to meet its commitment towards all stakeholders."