SEOUL, May 17 (Korea Bizwire) – South Korean shipbuilders and related firms sharply reduced the size of their workforces last year in the face of a drawn-out slump, industry data showed Tuesday.
According to the data compiled by industry tracker Chaebul.com, the shipbuilding sector slashed its workforce by 8,670 last year, or a 14.8 percent cut. The figure includes regular and nonregular workers.
South Korea’s major shipyards were in the midst of painful restructuring efforts last year due to snowballing losses stemming from a tumble in orders.
The three major shipbuilders alone — Hyundai Heavy Industries Co., Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. — implemented self-rescue plans, including asset sales and workforce reductions, to stay afloat.
The shipbuilding industry, once regarded as the backbone of the country’s economic growth and job creation, has been reeling from mounting losses caused by a fall in new orders, order cancellations and increased costs.
Last year, Hyundai Heavy swung to the black, while Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering continued to suffer losses.
The data based on 2016 business reports from 1,831 listed firms showed that their combined workforce reached 1.51 million at the end of last year, down 5,915, or 0.4 percent, from a year ago, as major conglomerates here cut their workforces to restructure or realign their business portfolios.
For one, Samsung Group, South Korea’s top family-controlled conglomerate, slashed part of its workers as its flagship Samsung Electronics Co. and other major subsidiaries implemented large-scale restructuring moves.
The data showed that 6,291 workers were cut at electronics firms, the second most after the shipbuilding segment, followed by the reduction of 3,416 workers at retailers and 1,030 at machinery equipment companies.
The major groups’ large-scale job reductions came amid the South Korean economy’s continued slowdown. Asia’s fourth-largest economy grew a mere 2.8 percent in 2016 from a year earlier, hit by falling exports and flaccid domestic demand.
The software and game-developing sectors increased their workforces last year, with securities firms also jacking up employment, the latest data showed.