World's Largest Building Site Eyes Thousands of Layoffs
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
Saudi Arabia's Neom megaproject, home to the world's largest construction site, could soon layoff thousands of workers.
Consulting firms were brought in by the Public Investment Fund to assess the project's feasibility as officials grappled with economic headwinds that may force significant downsizing at the site.
Newsweek contacted the Public Investment Fund and Neom for comment by email.
Why It Matters
The Neom project, particularly its centerpiece "the Line"—a planned 105-mile linear city—has served as a cornerstone of Saudi Arabia's Vision 2030 economic diversification agenda. Designed to house 9 million people in an ultramodern, zero-emission environment, the project was intended to reduce the kingdom's reliance on oil. However, escalating costs, reduced oil revenues and slower-than-expected construction progress have put the project's scale in jeopardy. The review process initiated by the Public Investment Fund could affect not only Neom's workforce but also the ambitions of Saudi Arabia to reinvent its economy and global image.
What To Know
In July, the kingdom's Public Investment Fund, which manages all Vision 2030 projects, engaged external consulting firms to assess the Neom's feasibility.
Semafor later reported that sources inside Neom were considering cutting its workforce and relocating more than 1,000 employees to Riyadh to control costs.
Currently, workers live on the construction site, where custom-built accommodation has been placed to make sure employees don't have to commute daily into the desert. As of April, about 2,800 workers were housed at the site, Neom's website said.
An image of the building site of the Line in Saudi Arabia.
An image of the building site of the Line in Saudi Arabia.
NEOM
In response to the report, Neom spokesperson Sahar Al-Anbar wrote on LinkedIn: "Change can be challenging, but firstly, let us establish that Neom is more than just a development project, it represents an ambitious national vision that is a key part of Saudi Arabia's development strategy.
"It's natural for a project of this scale to go through periods of review and adjustment. These actions are actually reassuring and reflect responsible management. By reassessing resource allocation, Neom takes a proactive approach to stay in line with its ambitious long-term objectives."
Neom has been plagued by allegations of worker mistreatment. In October, an ITV documentary said that about 21,000 foreign workers had died and 100,000 more had gone missing since 2017 while working on several projects as part of Saudi Arabia's Vision 2030 initiative.
What People Are Saying
Sahar Al-Anbar, a spokesperson for Neom, wrote on LinkedIn: "Handling challenges in large-scale projects require flexibility and a readiness to adapt. The ability to make strategic adjustments is a critical aspect of successful project delivery. It's encouraging to see Neom prioritize thoughtful planning and responsiveness, which are essential in bringing this visionary concept to life!
"Lastly, it's important to note that meals, schools, housekeeping service, etc, are provided as part of the remote-site allowance policy and are not standard benefits. Employees will still receive their current pay packages when moving to Riyadh."
What Happens Next
The ongoing review by consulting firms is set to guide the Saudi Public Investment Fund's final decisions regarding Neom's scale, workforce and timeline. The results are expected to determine whether the city will come close to its original 2030 completion goal or face further restructuring and delays.
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