Saudi BinLadin Group cuts jobs, salaries to deter COVID-19 fallout
KSA’s biggest construction firm has reduced the salaries of approximately 50,000 employees by 33% during Ramadan
Jeddah-headquartered construction giant Saudi BinLadin Group has begun to cut jobs and reduce staff salaries as the firm attempts to deter the fallout of the ongoing COVID-19 pandemic.
Saudi BinLadin Group – touted as Saudi Arabia’s biggest construction firm best known for its high-profile projects such as the Grand Mosque expansion – has placed thousands of employees on unpaid leave.
The firm, which is undertaking a $15bn debt restructuring to overcome delayed payments and a decrease in oil prices, is implementing ways of lowering costs by approximately 50%.
According to Bloomberg, Saudi BinLadin Group has reduced the salaries of approximately 50,000 employees by approximately 33% during Ramadan to reflect shorter working hours.
The firm is also reorganising under a new entity BinLadin International Holding Group, with the Saudi Government taking control of the Bin Ladin family’s 36.22% stake within the firm through Istidama – a subsidiary of Saudi Arabia’s Ministry of Finance – in order to settle “outstanding dues” under former chairman Bakr BinLadin, who was allegedly caught up in a corruption crackdown.
In 2016, the company cut more than 50,000 jobs after being unable to cope with the 2015 oil slump.
The KSA construction firm also overhauled its top management in 2019, and is currently led by Abdulaziz Al-Duailej as chairman, and Khalid Al Gwaiz as the chief executive officer.
In 2020, the Saudi Arabian firm is looking to overcome a new slump in oil prices, the economic impact of the COVID-19 pandemic, and the recently announced threefold increase in VAT from 5% to 15%.