Saudi Arabia's Neom weighs deep layoffs and relocations: Report
The website reported that Neom was weighing the layoffs as part of a broader overhaul that could also see more than 1,000 employees leave Neom's construction site on the kingdom's northwestern Red Sea coast, and relocate to Riyadh.
The plans are not finalised and could change, Semafor said.
The report is the latest in a string of articles that indicate Saudi Arabia is curbing its ambitions when it comes to Neom, the gigaproject designed to remake Saudi Arabia's Red Sea coast with luxury beach hotels, a ski resort, a 170km-long, futuristic city called "The Line", and an industrial park.
Bloomberg reported earlier this week that Saudi Arabia asked consulting firms to review the feasibility of "The Line'.
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Meanwhile, The Financial Times reported earlier this year that the kingdom had launched a "comprehensive review" of Neom.
The practicality of Neom has long been a source of debate, including among investors who doubt whether the kingdom can attract people to live in the futuristic, remote city.
Saudi Arabia's $ 1 trillion Public Investment Fund, known as PIF, is funding Neom's construction. The project has faced setbacks due to lower energy prices and limited interest from foreign investors.
Neom is the most ambitious part of Crown Prince Mohammed bin Salman's efforts to reduce the kingdom's dependency on oil revenue and diversify its economy.
He has been more successful pushing through liberalising social reforms, investing PIF money in startups and expanding Riyadh. At the same time, he has cracked down on dissent.
Why Saudi Arabia can spend more money than it makes, even as oil prices drop Read More »
For now, the kingdom is still reliant on oil revenue to fund its ambitious projects. Oil accounts for roughly 61 percent of Saudi Arabia's revenue, according to its 2025 budget. Brent crude, the international benchmark, has been trading below $70 per barrel for most of this year, well below the $100 per barrel level that economists say Saudi Arabia needs to balance its budget.
Neom has also been plagued by internal challenges.
Nadhmi al-Nasr, who managed Neom's construction from 2018 to 2024, departed from his post in November. He earned a chilling reputation, reportedly bragging that he put everyone to work 'like a slave' and 'When they drop down dead, I celebrate. That's how I do my projects.'
Nasr said last year that Neom had 5,000 full-time staff and 140,000 contractors.
Semafor reported that Neom is considering ending Nasr's policy that Neom staff be based at the desolate construction site. The employees who move to Riyadh will lose current benefits that include housing and meals paid for by Neom. Workers - mainly western expats - who vlogged their lives at the camp showed ultra-modern but bland housing complexes in barren landscapes.
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Middle East Eye
3 days ago
- Middle East Eye
Saudi Arabia's Neom weighs deep layoffs and relocations: Report
Neom is considering laying off up to 1,000 employees - an estimated 20 percent of its full-time staff - in another sign that Saudi Arabia is scaling back its premier giga-project, Semafor reported on Friday. The website reported that Neom was weighing the layoffs as part of a broader overhaul that could also see more than 1,000 employees leave Neom's construction site on the kingdom's northwestern Red Sea coast, and relocate to Riyadh. The plans are not finalised and could change, Semafor said. The report is the latest in a string of articles that indicate Saudi Arabia is curbing its ambitions when it comes to Neom, the gigaproject designed to remake Saudi Arabia's Red Sea coast with luxury beach hotels, a ski resort, a 170km-long, futuristic city called "The Line", and an industrial park. Bloomberg reported earlier this week that Saudi Arabia asked consulting firms to review the feasibility of "The Line'. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters Meanwhile, The Financial Times reported earlier this year that the kingdom had launched a "comprehensive review" of Neom. The practicality of Neom has long been a source of debate, including among investors who doubt whether the kingdom can attract people to live in the futuristic, remote city. Saudi Arabia's $ 1 trillion Public Investment Fund, known as PIF, is funding Neom's construction. The project has faced setbacks due to lower energy prices and limited interest from foreign investors. Neom is the most ambitious part of Crown Prince Mohammed bin Salman's efforts to reduce the kingdom's dependency on oil revenue and diversify its economy. He has been more successful pushing through liberalising social reforms, investing PIF money in startups and expanding Riyadh. At the same time, he has cracked down on dissent. Why Saudi Arabia can spend more money than it makes, even as oil prices drop Read More » For now, the kingdom is still reliant on oil revenue to fund its ambitious projects. Oil accounts for roughly 61 percent of Saudi Arabia's revenue, according to its 2025 budget. Brent crude, the international benchmark, has been trading below $70 per barrel for most of this year, well below the $100 per barrel level that economists say Saudi Arabia needs to balance its budget. Neom has also been plagued by internal challenges. Nadhmi al-Nasr, who managed Neom's construction from 2018 to 2024, departed from his post in November. He earned a chilling reputation, reportedly bragging that he put everyone to work 'like a slave' and 'When they drop down dead, I celebrate. That's how I do my projects.' Nasr said last year that Neom had 5,000 full-time staff and 140,000 contractors. Semafor reported that Neom is considering ending Nasr's policy that Neom staff be based at the desolate construction site. The employees who move to Riyadh will lose current benefits that include housing and meals paid for by Neom. Workers - mainly western expats - who vlogged their lives at the camp showed ultra-modern but bland housing complexes in barren landscapes.
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