Neom, World’s Largest Site, Plans 1,000 Layoffs

Saudi Arabia’s $500 billion Neom project is reportedly preparing to lay off up to 1,000 employees—around 20% of its full-time staff—and relocate a similar number from its remote construction site in the northwest to Riyadh, as part of a broader strategic overhaul.

The plans, which remain under review and could change, reflect growing financial and operational pressure on what has been called the world’s largest construction site. 

The affected employees relocated from Riyadh to the Red Sea location—170 kilometres from Tabuk—in October 2020, under former CEO Nadhmi Al-Nasr, who departed in November 2024.

The changes mark a break from Al-Nasr’s policy requiring staff to live full-time at the isolated site. Employees returning to Riyadh will lose remote-location perks such as free housing, meals and domestic services, although their base salaries will remain unchanged. 

Neom broke ground in 2017 as a futuristic city focused on innovation, tourism, and clean energy to diversify Saudi Arabia’s economy and reduce its reliance on oil. 

The development comprises several components, including Mukaab—a cubed skyscraper, and The Line, which was initially proposed as a 170 km-long and 500 m-tall city housing nine million residents.

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In April 2024, Bloomberg reported that Neom’s budget had ballooned to $1.5 trillion, while The Line’s scope had been drastically reduced to just 2.4 kilometres.

Only the first phase of Sindalah, a luxury island resort, has been completed to date.

An internal audit reported by The Wall Street Journal last year concluded that Neom “faced significant challenges, including soaring costs, delays, and unrealistic assumptions in its business plan.”

Additionally, Newsweek revealed that 35% of construction workers had already been laid off, and over 1,000 staff had been relocated to Riyadh—many losing site-based benefits despite retaining their salaries.

In response to growing concerns, Saudi authorities have hired consulting firms to re-evaluate The Line’s financial and technical viability. Analysts suggest the review could determine the future scale and pace of the entire Neom initiative.

Despite these headwinds, Crown Prince Mohammed remains publicly committed to Neom as a cornerstone of Saudi Arabia’s transformation. In January 2025, Italian state financier SACE pledged $3 billion in funding to support the project and expand Italian business participation.

Still, with oil prices hovering below $70 per barrel—well under the $100 level needed to balance the kingdom’s budget—and foreign investment into Neom falling short of expectations, questions remain over whether Saudi Arabia can deliver on its most ambitious giga-project.

In a LinkedIn statement, Neom spokesperson Sahar Al-Anbar said: “Change can be challenging, but Neom is more than just a development project—it represents an ambitious national vision.”

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