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Saudi Electricity to cut 5,000 jobs: document
RIYADH - Saudi Electricity Co. 5110.SE, the largest Gulf Arab utility by market value, has started an early retirement plan to cut 5,000 jobs and slash costs by 1.4 billion riyals ($373.3 million), a document obtained by Reuters showed.
Saudi Electricity would cut the jobs over a six-year period, with nearly a fifth of job losses occurring before the end of this year, the document, authored by a committee led by the Supreme Economic Council and chaired by King Abdullah, said.
The first phase of the plan will cost the state-controlled firm 500 million riyals, the document said.
Saudi Electricity has been struggling to find cash to meet growing power demand in the world’s top oil exporter.
“The committee strongly recommends that the government supports this (retirement) plan,” the document said.
When contacted by Reuters, Saudi Electricity spokesman Joumaan bin Ali al-Zahrani confirmed that the company had invited applications from employees for an early retirement plan, but declined to comment on the company’s targets.
“We started the plan known as the Golden Cheque but it’s too early publish its details,” Zahrani said.
“Stock market regulations prohibit us from commenting these figures. We will make an official announcement in due course.”
No exact figures were available on Saudi Telecom’s total number of employees, believed to exceed 20,000.
Surging demand
Saudi Electricity was forced to ration power to firms in the Riyadh area and eastern province, the kingdom’s main industrial hubs, for two weeks last August due to technical failures during the peak summer season.
Chief Executive Ali bin Saleh al-Barrak estimated last year at least 150 billion riyals of investment would be needed during the next 10 years to cope with a rise in demand for electricity in the kingdom, home to around 24 million people.
King Abdullah last year ordered financial aid for the company to help it cope with rising demand.
Saudi Electricity lost 434 million riyals ($115.7 million) in the first three months of 2007, but profits usually surge in the hot summer when consumers switch on air conditioners.
Shares of Saudi Electricity are down 7.7 percent this year. They were unchanged at 1146 GMT.
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