Protests, layoffs and debt: Is the Bin Laden construction company in turmoil?
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Saudi Binladin Group, founded by Osama bin Laden's father, is a giant of Saudi Arabia's construction industry. But with reports it has laid off 50,000 workers as it struggles under a mountain of debt, the once mighty company appears to be in turmoil.
In a video posted on YouTube Saturday, flames rise high from a row of blazing buses and light up the night sky. The footage reportedly shows the result of a protest by disgruntled workers of the Binladin Group, angered by months of unpaid wages and the layoff of tens of thousands of staff.
Local media said that a total of seven company buses were set on fire by the protesting workers. Major Nayef al-Sharif, the spokesman for the Civil Defense in the city of Mecca, told the Associated Press late Saturday that firefighters put out the blaze without any injuries reported.
The protests came a day after news broke that the company has let go some 50,000 workers – totaling a quarter of its workforce going by the 200,000 employees the firm claims to have on its LinkedIn page.
The sacked workers, apparently all foreigners, were given permanent exit visas to leave the kingdom, Saudi newspaper al-Watan reported, citing unnamed sources.
Protests are rare in authoritarian Saudi. But workers at the Binladin Group have been demonstrating outside Binladin's offices in the country almost daily over unpaid wages, the paper said. It said some had not received wages for more than four months.
The Binladin Group has not issued any statement about the lay-offs nor the allegations of unpaid wages. An emailed request for comment from FRANCE 24 went unanswered.
It is the latest sign that all is far from well at the company – one of the biggest construction firms in the Middle East – as it struggles to deal with a major downturn in government spending on infrastructure along with falling out of favour with Saudi's powerful royal family.
Founded in 1931 by Sheikh Mohammed bin Laden, the Binladin Group has grown into a vast construction conglomerate but one that firmly remains a family-run business.
Its current chairman, Bakr bin Laden, is one of Mohammed's more than 50 sons. Several of his brothers sit on the company's board of directors.
Osama bin Laden owned shares in the company until 1993, when the former Al Qaeda leader was disowned by the family.
Despite the negative connotations of the Bin Laden name in the aftermath of the September 11th attacks, the Binladin Group prospered along with the petroleum-fuelled economies of Saudi Arabia and other Middle Eastern states.
Its close ties with the Saudi royal family helped it win contracts for some of the Gulf kingdom's biggest infrastructure contracts. It is one of the main contractors working on the Jeddah Tower in Jeddah, which when completed will be the world's tallest skyscraper at just over 1,000 metres high.
But the Binladin Group, like many of the region's construction companies, has been hit by a dive in oil prices, which has seen the Saudi government significantly rein in its infrastructure spending as it looks to fill a near-$100 billion (87 billion euros) budget deficit.
The group suffered another setback in September last year when one of its cranes collapsed during construction work at Mecca's Grand Mosque, killing 111 people days before the start of the annual Hajj pilgrimage.
The Saudi government blamed the group for the accident and, despite their previously close ties, barred the firm from acquiring new contracts.
$30 billion in debt
The extent to which this downturn in fortune has impacted on the firm's finances is uncertain as the tight-lipped company issues no public financial statements.
But a report in March in the Wall Street Journal claimed that the Saudi Binladin Group was loaded with debt totalling more than $30 billion, citing regional and international bankers.
An unnamed executive at one of the group's subsidiaries told the newspaper that the parent company hadn’t provided any funding to the unit for more than six months.
Meanwhile, the job cuts at the Binladin Group and Saudi's wider economic woes are another blow to Saudis legion of foreign workers.
International Monetary Fund figures show 56 percent of the kingdom's workforce were expats as of 2013, the vast majority in low-skilled, low-wage jobs. But not only has Saudi frequently been accused of human rights abuses in its treatment of migrant workers, but the government has recently introduced measures to reduce its reliance on overseas labour and boost employment among Saudi Nationals.