Private companies that were previously in the red zone of the Nitaqat nationalization program for having an insufficient Saudi-to-expat ratio have let go more than 70,000 foreign workers over the last two years in a bid to hire more nationals, according to private sector experts.

Small and medium-sized enterprises (SMEs) represent the bulk of companies falling into the red category, as they have few workers and cannot generate enough jobs for both Saudis and expats.

Contractors for government bodies, meanwhile, have stopped hiring foreigners altogether.

“These many expats have been fired in order to attract fresh Saudi graduates to work on a minimum wage of SR6,000 just like expats,” said Farooq Al-Khateeb, an economy professor at King Abdulaziz University.

“SMEs are interested in hiring fresh Saudi graduates who would agree to work for lower salaries than professional Saudis, who earn far more,” he told Arab News.

“Several hundred expats had also been fired by companies with a sufficient number of Saudis,” said Fadal Abu Al-Ainain, an economic consultant with several private firms. “The Labor Ministry must close the doors of foreign recruitment so that professionals already living in the Kingdom can find jobs,” he said.

“The Labor Ministry will take measures in the next few days with the aim of motivating companies that have been in the red zone for three months or more to increase the percentage of Saudis on their payrolls in line with the nationalization scheme,” said Abdul Moneam Al-Sherry, director of the Labor Department in the Makkah region.

“Companies in the green zone accounted for nearly 40 percent of all establishments in mid-2011 and this figure increased to 81 percent by the end of 2013,” he said. “Only around six percent of business owners failed to improve their Saudi-to-expat ratio.” The Labor Ministry, however, said that 20 percent of Saudi firms were still in the red zone two years after the implementation of the Nitaqat program despite the ministry’s intensive campaign to nationalize jobs in the private sector.

The Nitaqat program replaced the original Saudization program that was initiated in 1994 as a means of reducing reliance on foreign labor, but the initiative failed to realize the goal of attaining the 30 percent Saudization target.

The Nitaqat program, which incorporated incentives for companies that met certain standards, has been far more successful, said experts.