Job cuts and salaries for foreigners could threaten Qatar’s economic growth by raising the risk of labor shortages, according to reports.
12 June 2020, 12:00 AM
30 June 2020, 12:00 AM
Qatar told government-funded entities to cut spending on non-Qatari staffers’ wages as it tries to shore up its finances to cope with the impact of the coronavirus pandemic.
The Ministry of Finance instructed government ministries, institutions and entities funded by the state to reduce monthly costs for non-Qatari employees by 30% from June 1, either by cutting salaries or laying off workers with a two-month notice, according to a letter seen by Bloomberg.
At the same time, cutting jobs and salaries for foreigners could threaten Qatar’s economic growth by raising the risk of labor shortages and hurting consumer spending. Foreigners constitute 95% of the total workforce.
Oxford Economics predicted Qatar could see roughly 10% of its population depart, an exodus that “could have longer-lasting implications."
Besides slashing budgets for foreigners’ pay, the Finance Ministry additionally halted certain benefits, some of which also affected non-Qatari staff. It ordered a halt to promotions and cash allowances for staff in lieu of vacations and tickets, unless they are granted at the beginning or the end of their employment period. It also halted advance payments, except for marriages.
Qatar’s government communications office didn’t respond to requests for comment after business hours on Wednesday.