Saudi Binladin Group (SBG), the biggest contractor in the kingdom by turnover, will conclude the employee reduction programme that has involved about 70,000 job cuts at the firm, by the end of May or the beginning of June, a company spokesman has said.

Half of the laid-off foreign workers have received their end-of-service benefits and have already left Saudi Arabia, the spokesman told MEED. SBG has transferred the work permits of another 15,000 workers to other employers and visa cancellation of about 8,000 employees is under process at the Saudi Labour Office. The procedures to finalise the termination of contracts and settlement of dues for more than 10,000 employees will begin shortly, the spokesman added.

“The manpower action programme is progressing as scheduled,’’ said the spokesman, adding that the company is carrying out the manpower reduction in coordination with the labour authorities in the kingdom.

All the staff fired so far are foreign workers and none of the Saudi employees have been let go, he said, adding that the company will clear their dues according to the applicable laws if any of the Saudi nationals chose to leave the company.

The spokesman denied earlier media reports suggesting the company has laid off close to 80,000 employees. The company has been “fully transparent’’ in manpower reduction, he added.

SBG, one of the oldest and the biggest contracting firms in the region, has mainly relied on multibillion-dollar state contracting for business. The company ran into financial difficulties and laid off workers to cut cost as the government barred it from competing for new business in the kingdom following a crane accident late in 2015, which claimed more than 100 lives in the holy city of Mecca.

The ban was lifted last week through a royal decree, but the company is still awaiting delayed payments from the government.

The large-scale layoffs at the company have led to violent protests and some workers who have reportedly not been paid for months set company buses on fire. In March, SBG also had to seek help from Mecca police and agree to pay delayed salaries to its staff in a deal with the Labour Ministry to end the protests.

The labour strife has prompted government intervention. Labour Minister Mufarrij al-Haqbani on 3 May said the crisis surrounding SBG will be resolved as the company has promised to address all wage-related issues. He added that some workers will get paid this month, with some others receiving salaries in June and so on.

SBG is also raising a loan valued at close to SR2.5bn ($667m) from a group of local banks, after it agreed to pledge its properties in Mecca and Jeddah.

The contractor intends to primarily use the funds to clear end-of-service dues and boost cash reserves to regularise delayed salaries of the employees, banking sources told MEED on 8 May.

SBG had originally approached banks about a month ago to secure SR5bn in cash. However, only a small group of lenders have agreed to extend the SR2.5bn facility. The deal will be signed shortly and lenders Sabb and Arab National Bank are said to be leading efforts to arrange the loan for SBG. The assets pledged by the firm are valued between SR7bn to SR9bn, which will give the banks additional security on their overall SBG receivables, according to the sources.

A Jeddah-based spokesman for SBG declined to comment on the transaction.