Saudi’s expat workforce shrinks for the first time in more than two years

Foreigners employed in the country, excluding domestic workers, fell by 16,000 in the three months to June, driven by a drop in construction jobs. Saudi Arabia’s expatriate workforce shrank for the first time in more than two years, amid layoffs, the Iran war, and a backlash against hiring foreigners at state-controlled companies. Foreigners employed in the country, excluding domestic workers, fell by 16,000 in the three months to June, driven by a drop in construction jobs, according to the government’s quarterly report. Medical insurance policies for expats didn’t grow at all in the first six months of 2026, another indicator that fewer foreigners are coming to the kingdom. State-controlled firms have been trimming workforces or not renewing contracts as budgets were cut for some projects, while others, like NEOM, have scaled back significantly. The Iran war has also dented the region’s reputation for safety. The unemployment rate for Saudi citizens hasn’t budged and the economy is creating new jobs, albeit at a slower pace. Forward-looking data from the Purchasing Managers’ Index suggests hiring will bounce back.