South Korea’s ‘big three’ shipbuilders have announced plans for a large number of lay-offs.
Hyundai Heavy Industries(HHI), Daewoo Shipbuilding & Marine Engineering(DSME) and Samsung Heavy Industries(SHI) are said to be planning to lose about 3,000 workers this year after suffering very large 2Q15 losses.
HHI, which recorded more than KRW3 trillion (USD2.5 billion) in losses last year, confirmed to IHS Maritime that it had already cut about 1,300 staff, mostly in office jobs, in early 2015. In March it accepted applications for voluntary resignation from female employees with more than 15 years’ service.
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HHI revamped its senior management team, reducing the number of executives by 31% in late 2014. In July 2015, it required 25 executives to submit resignations and then replaced them with younger people.
It reported that, following restructuring efforts, it had managed to improve the internal efficiency of the organisation.
There were similar moves at DSME. It told IHS Maritime that 13 executives and advisers, including Ko Jae-ho, the former CEO, had resigned. With a number of other resignations, the number of executives decreased from 55 to 44. The company posted a huge KRW2.4 trillion loss in the second quarter of 2015.
DSME now plans to accept voluntary resignations and could ‘advise’ individuals to resign to target a reduction of about 1,300 employees at senior manager level by end of the month.
SHI posted KRW1.15 trillion loss for the second quarter, reversing a KRW11.6 billion profit for the same period last year. It is reportedly going to offer early retirement to some executives.