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Labor cuts seen as era of cheap oil begins
April 30, 2016, 5:15 pm

Construction company Saudi Binladin Group has laid off 50,000 staff,  as pressure on the industry rises amid an era of cheap oil. 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 newspaper Al Watan, citing unnamed sources, reported that the group has terminated the contracts of 50,000 workers - apparently all foreigners - and given them permanent exit visa to leave the Kingdom.

The paper said the workers refused to leave the country without getting paid and some had not received wages for more than four months. They were protesting in front of the Binladin's offices in the country almost daily, the paper added. Binladin did not immediately reply to an email seeking comment on Friday.

The company has had a series of pay disputes with workers this year. In March, scores of workers gathered outside one of the company's office in Saudi Arabia to demand unpaid wages. Binladin built many of the Kingdom's flagship infrastructure projects including airports, roads, and skyscrapers.

Kuwait also plans to cut the number of foreign workers and laws aimed at reducing the number of expatriate workers are being contemplated. the ministry's efforts to regulate the labour market, curb the phenomenon of marginal labour and restore the demographic equilibrium of the country has been on for some time now.

Kuwait, a country of 4.3 million, has relied on foreign labour for decades, particularly in the private sector. Fifty-five percent of the population is Asian, and Kuwait employs 700,000 domestic workers alone.

Eighty 80 percent of the 350,000-strong Kuwaiti workforce has government jobs, where salaries tend to be higher. The expatriate population has become an issue recently amid rising public criticism of the country's economic development. Kuwait's wage and subsidy bill is the largest part of its national budget, and critics have accused expatriates of being a drain on government finances.

Foreign labour is also a charged topic in part because many associate it with Kuwait's more than 100,000 stateless residents, known as the bedoon. Although many have lived in Kuwait for generations, they lack access to even basic services such as education and the ability to take on official work.

Kuwait has said it expects to post a record $38bn annual budget deficit in the next financial year due to falling oil prices. The shortfall for the 2016-17 year is 30 percent of the country's gross domestic product. Kuwait said it expects to post a $23bn budget deficit in the current fiscal year 2015-16, the first after 16 years of surplus.

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