Saudi-based contractor Abdullah Abdul Mohsin al-Khodari and Sons said it will book a multi-million riyal loss to reassign a government contract it won back in 2014 to another company.
The reassignment will result in a loss of $5.1 million (SAR19.4m), according to Khodari.
Khodari is one of the many construction-related firms to have been pressured by a severe slowdown in the sector due to cutbacks in state spending as oil prices drastically dropped.
In March 2014, it won a $38 million (SAR144m) contract to construct a building in the western city of Taif.
However, Khodari said it has received government approval to reassign the project to Moenes Mohamad Al Shayeb Civil Works Co, Reuters reported.
The move was one of several measures it is currently undertaking in response to labour market reforms and current weakness in the construction sector.
Since 2011, the government has increased efforts to push more Saudi citizens into private-sector jobs by making it more expensive and difficult for companies to hire large numbers of foreign workers.
Khodari said its decision to pass over the Taif contract was also in response to delayed payments, with the company seeking to reduce its exposure to government projects in favour of work that is not directly state-related.
