U.S. Workers Want Out Of The Kingdom
By Janet Guyon With reporting by Wilfried Eckl-Dorna

(FORTUNE Magazine) – Five days after gunmen attacked a residential compound in Khobar on May 29, Jerry Johnston packed his bags and went home to West Columbia, Texas. After 13 years working and living in Saudi Arabia, he'd had enough. "No matter how much money you make, you can't spend it if they cut your head off," says Johnston, 59, who worked for Saudi Aramco, the state-owned oil company.

For decades Saudi Arabia has been known for offering expats high pay and lush accommodations in heavily fortified (and extremely safe) compounds. But following months of escalating tension (capped off by the Khobar attack and the beheading of Lockheed Martin employee Paul Johnson by al Qaeda terrorists on June 18), scores of Westerners are packing up and going home.

But it's not just al Qaeda that has workers on edge: Those who've recently returned to the States tell of unprecedented harassment by ordinary Saudis. Objects thrown at cars, Saudis pointing fingers out of car windows to imitate a pistol, and obscenities shouted at foreigners with no provocation are just some of the reported incidents. "Suddenly we're seeing checkpoints and machine guns mounted on the back of pickup trucks at strategic points," says an expat from Kentucky who is about to leave the Saudi kingdom. "It's a shock for people who have been here a long time and know how safe the place has always been."

Control Risks Group, a corporate risk consultant in London, estimates that perhaps 100,000 Westerners, including 25,000 British and 20,000 to 30,000 Americans, are employed in the kingdom in industries ranging from oil to software. But amid the violence, companies have been reevaluating their staffing levels and their policies on dependents, says CRG's Kevin Rosser--as well as beefing up security. Service companies that can have relocated employees to Dubai or Bahrain, "which are considered more safe," Rosser says.

After five ABB workers on contract to Exxon Mobil's chemical joint venture in Yanbu, an industrial city 190 miles north of Jidda, were killed outside the plant May 1, ABB offered to repatriate its Westerners in Yanbu. All of them--more than 100 people including families--left. Lockheed Martin as well has changed its policies, ordering out all American dependents in mid-April. That did not include Johnson's wife, who is Thai and had elected to stay with him in the country, says Lockheed Martin spokesman Tom Greer. More evidence of an expat exodus appears on Saudi Aramco's employee intranet: In the classified-ad section, several dozen cars are up for sale--almost double the usual 20, employees say.

In response the Saudis have beefed up security and pledged to root out terrorists (and their financial supporters) throughout the kingdom. Few Saudis have the skills to do the jobs of Westerners, and those who do demand more money. Nonetheless, many experts believe that the recent violence may be just the beginning of a new and unprecedented round of unrest in the home of America's key oil ally. If so, Westerners will continue to flee. And that can only hurt both American and Saudi interests.

--Janet Guyon, with reporting by Wilfried Eckl-Dorna