Saudi Binladin Group, a Saudi-owned construction company, has laid off about 77,000 foreign workers and plans to cut thousands of jobs held by Saudi nationals, according to a local newspaper report.

Binladin has issued 77,000 final exit visas to foreign workers so that they can leave Saudi Arabia, and is expected to lay off 12,000 of 17,000 Saudis in supervisory, administrative, engineering and management jobs, Al Watan newspaper quoted an unnamed source in the company as saying on Monday.

While Saudi construction companies regularly cut or expand their foreign staff in response to changing demand in the industry, they rarely lay off large numbers of Saudis, partly because it is legally difficult and expensive.

The total workforce at Binladin, one of Saudi Arabia's biggest firms and among the Middle East's largest builders, is around 200,000, according to its LinkedIn page.

Saudi Arabia agrees on economic reform plan

Asked to comment, Binladin did not give a figure for job cuts but said: "Our manpower size is always proportional to the nature and scale of the undertaken projects, along with the time spans required to complete them.

"Adjusting the size of our manpower is a normal routine especially whenever projects are completed or near completion. Most of the released jobs had initially been recruited for contracted projects with specific time frames and deliverables."

Under pressure

Binladin said it understood job reductions were never easy for people involved and that it would honour its commitments to compensate affected workers under the law.

Binladin has been under pressure since September last year, when it was suspended from receiving new state contracts after a crane toppled into Mecca's Grand Mosque during a dust storm, killing 107 people.

Counting the Cost: The oil game uncovered

In addition, the company has been hit by fallout from low oil prices which have led to government spending cuts to curb a budget deficit that totalled nearly $100bn last year.

The cuts have forced Binladin and other construction companies to delay paying some workers' salaries, in some cases for months. In response, some unpaid staff have stopped turning up for work, slowing work on some Binladin projects such as the King Abdullah Financial District in Riyadh.

The company has declined to describe its financial situation publicly.

Two Gulf banking industry sources, declining to be named because of commercial sensitivities, said it was believed to owe local and international banks a total of about $30bn.

Bankers said the company had been meeting with banks to reassure them that its loans would be repaid, and that it had brought in outside experts, including foreigners, to streamline its project management and budgeting skills.

Source: Reuters