Saudi jobs growth ‘likely to halve’ as PIF reins in spending

• Slowdown to 3% says consultancy
• Drop in salaries forecast
• Two million expats arrive since 2023

Employment growth in Saudi Arabia will halve by 2026 as the kingdom reins in spending and focuses on delivering Vision 2030 projects, recruitment and real estate specialists are saying.

Growth in recruitment for jobs in the Saudi economy, after hitting a high of nearly 10 percent in 2022, will slow to 3 percent by 2026, a report by the consultancy JLL Middle East predicts.

The $925 billion Public Investment Fund (PIF) has ordered spending cuts across more than 100 of its portfolio companies, leading to layoffs, hiring freezes and project delays, although the total number of jobs is still growing.

“Giga-projects are scaling too quickly without long-term planning or clear strategy,” said Shyam Visavadia, founder of WorkPanda Recruitment in Dubai, a specialist in construction hiring.

Future phases are “either postponed, remastered, or not receiving budget approvals,” Visavadia said.

The fallout is prompting workers to seek jobs elsewhere in the region, even if it means taking a pay cut to relocate or shift to other PIF-backed companies, he said.

“Many people have become disillusioned with the vision, working style, and culture and are now seeking a return to more structured corporate environments within larger, reputable firms, even if it means sacrificing salary and benefits,”Visavadia said.

Nearly two million expatriates, both skilled and unskilled, have joined the workforce in Saudi Arabia over the past two years, official data shows.

But the latest fiscal tightening may be signalling a shift as economic headwinds grow.

The kingdom is grappling with a widening budget deficit, brought about by a drop in both the volume and value of oil exports.

Ian Giulianotti, executive director at the regional recruitment firm Nadia Global, said: “Certainly, the uncertainty with the current oil price scenario will affect both Saudi Arabia and the UAE.” 

Some industry leaders say the current slowdown reflects an overdue correction after a period of unsustainable growth.

Saudi Arabia indicators

David Clifton, regional director at the engineering firm AtkinsRéalis, said: “Ultimately the industry will see some contraction in manpower, which will also ease the pay inflation.”

A more normal environment should return and the Saudi economy should become more stable, he said. The construction industry has effectively more than doubled in size, “but not always with the best solution to the project. That is a positive for getting jobs done,” Clifton said.

He forecast drops in salaries of 5 to 15 percent as the market resets.

Some of the pressure came from the number of people coming to the region “on speculation”, candidates arriving without confirmed jobs, particularly at the mid-management level, Clifton said.

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“There’s still scope for experienced individuals at higher levels, although that is also becoming more competitive,” he said.

Justin McGuire, founder of Remote Resource, a recruitment agency in Dubai,said the current slowdown was not a dramatic drop-off, but “more of a pause and reset”.

“I’ve seen cycles like this before. What’s happening now feels more like a correction than a collapse,” he said. “There’s still a huge sense of ambition in Saudi Arabia and it remains the most exciting place on the planet for business right now.”