RIYADH (Reuters) - Saudi Arabia’s Binladin Group has cut thousands of jobs and reduced staff salaries between 30% to 70% as the coronavirus outbreak hurts business of the kingdom’s biggest construction company, three sources familiar with the matter said.
The sources declined to be identified and the company did not respond to an email request for comment.
Binladin has dominated the Saudi construction sector for years and is central to the country’s plans for tourism and infrastructure projects aimed at diversifying the economy away from oil revenues by 2030.
Those plans risk being compromised by an economic downturn caused by the coronavirus pandemic and low oil prices that are forcing the government to rein in spending and increase borrowing.
Thousands of its staff have either been let go or sent on unpaid leave, especially those who were working on construction sites in the open and where work has been hampered by the coronavirus outbreak, sources told Reuters.
In addition, the company has enforced salary cuts between 30% to 70% and cancelled other allowances like transportation, in an effort to reduce costs, they said.
Earlier this month Reuters reported that the company was seeking an adviser to cut costs as well as restructure the debt of a Mecca skyscraper complex.
The move is part of efforts to restructure the construction group, after the government took a 35% stake from Bin Laden family members that were swept up in an anti-graft campaign launched by Riyadh in late 2017.
Reporting by Marwa Rashad; editing by Saeed Azhar and David Evans
Our Standards: The Thomson Reuters Trust Principles.