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Saudization in full gear: Thousands of expat jobs are disappearing

Saudi Arabia is bent reducing country's unemployment numbers by nationalizing many job sectors

A program was launched to nationalise 14,000 jobs in the ICT sector As many as 273,860 workers, of whom 96.4% are expatriates, have left the labour market in the third quarter of 2018 100% Saudization of jobs in the tourism hospitality sector will happen in three tracks starting with 20 hospitality jobs as of next year

Saudi Arabia is to nationalize 14,000 jobs in the communications and IT sectors.

That’s not the end of it. 

Tech jobs phased out to Saudis

The Saudi Ministry of Communications and Information Technology and the Human Resources Development Fund (Hadaf) have launched a program to nationalise 14,000 jobs in the ICT sector.

The targeted functions include specific areas such as artificial intelligence, IoT, software development, game development, databases, among others, Zawya reports, quoting a ministry statement.

“The program, which is divided into four phases, targets technical support functions in the first phase and data analysis functions in the second phase,” according to a statement by the ministry. “The third and fourth phases will focus on project managers and call centre staff,” it adds.

Mohammed bin Ahmed Al-Sudairy, Director General of Hadaf said: “The program aims to support Saudisation through training and equipping Saudi nationals from both genders with the knowledge and skills needed to adapt to the needs of the labour market in the telecommunication and information technology jobs in the private sector.”

At the beginning of this year, the Saudi Ministry of Labor and Social Development started implementing Saudisation in five key sectors: Building and construction material shops, medical appliances and equipment shops, car spare parts shops, shops selling carpets and confectionary shops and patisseries.

National Transformation Plan (NTP)

The Ministry of Labor and Social Development had announced a plan to set up national and regional councils to activate the public-private partnership and resolve challenges that obstruct further economic growth in carrying out the ambitious plan outlined in the National Transformation Program 2020 (NTP) and in Saudi Vision 2030.
 The initiative will involve the private sector in designing and implementing nationalization solutions as well as increasing the number of good job opportunities for Saudi nationals in various sectors.

The plan is expected to usher the Kingdom into the digital age.

Expats leaving

According to a Saudi Gazette report, as many as 273,860 workers, of whom 96.4% are expatriates, have left the labour market in the third quarter of 2018.

At least 13,000 Bangladeshi workers have so far been deported from Saudi Arabia in 2019 alone, “as a likely result of Saudization policy of hiring Saudi nationals over migrant workers,” Rownak Jahan, secretary of the Expatriates’ Welfare and Overseas Employment Ministry said.

According to a Saudi Press Agency report, the Saudi authorities have so far arrested around 3.8 million foreigners as it continues the crackdown on labour and residency violations.

The latest figures indicate that 544,521 people have been arrested since early June.

In just 18 months, more than 800,000 expats had left the country. The number exceeds an estimation in 2017 which claimed 670,000 expats would leave Saudi Arabia by 2020. However, during the peak of it all, the Saudi unemployment rate reached an all-time high.

Saudi unemployment drops

According to a 2019 report, the unemployment rate in Saudi Arabia dropped in the third quarter of last year. The rate went up to 12.9% in the first quarter of 2018 but decreased down to 12.85 in the third quarter. The spike came after the kingdom introduced a 5% VAT, which impacted private employers. 

The kingdom has passed several orders to ensure the Saudization process checks out including one that terminates all contracts pertaining to expatriate workers in governments and ministries within three years and another that nationalizes jobs in shopping malls. 

Hospitality jobs are in line next

The Minister of Labor and Social Development Eng. Ahmed Al-Rajhi has issued a decision to Saudize the management, and leading and specialist professions in the tourism hospitality sector.

 The decision includes hotels classified as 3-star and above, resorts, hotel suites, and villas classified as 4-star and above. The ministry’s decision stipulates 100% Saudization of jobs in the tourism hospitality sector in three tracks starting with 20 hospitality jobs as of next year.

The Saudi government has also banned the use of foreign consultants except when the availability of a Saudi counterpart is not available.