Will Saudi Arabia’s Neom Lure India's Top Engineers Away from the U.S.
Vishal Wanchoo, CEO Oxagon, Saudi Arabia
October 11, 2022
Most of India’s top engineers, technical and scientific talent seek jobs in the U.S., Canada, Australia, and Singapore. They have largely shunned working in the Middle East due to the relatively low pay and lack of career advancement opportunities. However, soon they will likely be eager to work, at least, in Saudi Arabia. They will join nearly ten million Indians who now work in the Middle East as office employees, as well as skilled and unskilled laborers in the oil and gas industry, construction, cleaning, and other services.
Prince Mohammed bin Salman, the Crown Prince of Saudi Arabia, has launched several mega projects to sharply reduce the kingdom’s economic dependance on oil and gas exports by 2030. Neom, one such project under construction, is offering senior managers $1.1 million in annual salary, about a quarter more than at most large companies in the U.S., according to The Wall Street Journal. In addition, there is zero tax on income earned in Saudi Arabia and managers may also receive an annual bonus.
Vishal Wanchoo, a former executive at GE, is among the roughly 20 Saudi and foreign senior managers at Neom. He oversees the manufacturing operations and is Chief Executive of Oxagon. When completed, Oxagon “will be the industrial heart of the city of NEOM…the leading region for advanced clean industries, innovation, research, and supply chain platforms,” Wanchoo, 64-years-old, said at the Second Saudi International Iron and Steel Conference earlier this year.
Oxagon is a 48 square kilometer floating industrial complex being built from scratch along the Red Sea, with factories, manufacturing facilities and a port, a logistics hub, and a cruise terminal. Given Oxagon’s location near the Suez Canal, the passageway for 13% of global trade, Wanchoo expects it will “attract industries to build an export-based economy,” powered by artificial intelligence, machine learning and robots. By 2030, the city is forecast to provide jobs for 70,000 and house 90,000 and will include water and marine sports and other recreation.
Neom, envisioned as “a home for people who dream big,” will focus on building major businesses including in energy, water, mobility, entertainment and culture, and food. Neom stands for the Greek word Neo, for new, combined with M for Mustaqbel, the Arabic word for future, and the first letter of the name of the Saudi Crown Prince; he is the chairman of Neom’s board of directors.
A roughly 10,000 square mile development along the Red Sea, Neom will house nine million people upon completion of the first phase. The entire project is estimated to cost $500 billion, with major funding from the Saudi Sovereign Wealth Fund. Other investors are expected to include sovereign funds from Middle East countries; there is also a plan to raise funds through a public listing in 2024.
While Neom’s high salaries attract senior managers from around the world, there is also major turnover among senior managers. So far, expatriate chief executives of three mega projects and several senior managers have resigned, reportedly unhappy with a toxic management culture.
“I drive everybody like a slave…When they drop down dead, I celebrate. That’s how I do my projects,” Neom’s Chief Executive Nadhmi al-Nasr said in a meeting, according to the Wall Street Journal. Nasr, a former executive at oil giant Saudi Aramco, reportedly has the backing of the crown prince since he has successfully executed major projects in the kingdom.
Other former Western executives, who have worked on major Saudi projects, told the Journal that while Saudi executives can be aggressive and direct, they are often reasonable and that many expatriates thrive.
Earlier this month, a Saudi court sentenced to death three members of the Huwaitat Tribe, who were organizing opposition to the forcible eviction of local nomads to clear the land to build Neom, according to ALQST an Europe based Saudi civil rights group. In 2020, a brother of one the three was shot dead by the police at his home “after he posted videos on social media opposing the displacement of local residents…” In 2020, ALQST and other civil rights groups issued an open letter appealing to consulting firms McKinsey, Boston Consulting Group, and Oliver Wyman working on the Neom project, “to speak out against the human rights violations associated with it.”
Wanchoo joined Neom in 2021. Earlier, he served 22 years at GE, the Boston, U.S., based power, aviation, energy, and healthcare company, with a market value of $70 billion. His most recent position was CEO of South Asia for GE, based in a Delhi suburb, where he oversaw 17,000 employees, 16 manufacturing plants and four research and development centers.
He joined GE in 1997 as a General Manager of the Healthcare Information Systems unit based in Chicago, U.S. From 2011 to 2020, he served in India, including as head of strategy. Prior to GE, from 1988 to 1997, Wanchoo was at Agfa Healthcare, in New Jersey, U.S., including as vice president of Electronic Imaging Systems.
Wanchoo earned an M.S. in Computer Science, 1982, from the University of Southern California, and a BTech in Electrical Engineering from the Indian Institute of Technology, Delhi.
As the Neom and other mega projects progress, Saudi Arabia will need to hire several thousand mid-level and entry-level engineers, data scientists, technologists, and other professionals. Many of them will likely be Indian males – given employment and other restrictions on women in Arab countries - and India’s large talent pool surplus. The high, untaxed salaries makes Saudi Arabia more attractive to Indians compared to Singapore and the other South East Asian countries.
As in Singapore, though, Indian workers are contract employees and cannot become citizens in Saudi Arabia, or the other Middle Eastern countries. Also, Indians may not have pension and healthcare coverage in their retirement, provided by their employers, even if they work 30 years for companies in the Middle East. So, the first choice for highly skilled Indians, seeking more lucrative jobs, will continue to be the U.S., Canada, and Australia where they can become citizens and have pension, healthcare and other retirement benefits.
However, Neom and the other Saudi mega projects will likely attract Indians working in the U.S., or seeking jobs there, who do not want to deal with the uncertainty and wait ten or more years for permanent U.S. residency visas or green cards. Also, given the regular cycle of layoffs at companies in the U.S. – one such cycle has just begun - Indians who are permanent residents or citizens in the U.S. may seek jobs in Saudi Arabia.
As it is, even highly skilled green card holders and U.S. citizens have a tough time finding jobs in the U.S. after they are laid off, especially those who are over 40 years old. Many of them end up taking jobs which pay far lower than their previous jobs or switch careers, including working for U.S. government agencies. Some have already taken up jobs in Saudi Arabia and the other Arab countries.
Similarly, some mid-career Indians, who are permanent residents or citizens of Canada, will likely pursue jobs at Neom and other Saudi projects. In their case, the tax-free salaries they receive in Saudi Arabia is far more lucrative, since salaries in Canada are generally lower than in the U.S.
Speaking of his work at Neom, Wanchoo told the Saudi Iron and Steel conference, “through these mega projects and cities, (Saudi Arabia) faces a historic opportunity to lead the global transformation in renewable energy solutions, construction technologies, and modern industries compatible with the environment.”
