SEOUL, Dec. 28 (Korea Bizwire) – About 300 office workers of embattled Daewoo Shipbuilding & Marine Engineering Co. (DSME) will go on a month-long unpaid leave in January as part of efforts to cut costs, sources said Wednesday.
They will be the first batch of DSME’s 4,700 desk-job employees who will take turns on unpaid leave from January in line with the company’s self-help measures aimed at helping the ailing shipyard stay afloat.
In June, about 350 office workers applied for unpaid leave, and the shipbuilder is fine-tuning the plan due to the company’s reorganization early this month, the sources said, adding the number is unlikely to change much.
DSME’s workforce is currently estimated at 11,200, with office workers accounting for 42 percent of the headcount and production employees taking up the remainder.
DSME will be the first among the nation’s top three shipyards to actually make officer workers take unpaid leave, though two others — Hyundai Heavy Industries and Samsung Heavy Industries Co. — have included no-pay leave in their self-rescue programs.
“The unpaid leave program will not only apply to 2017. DSME plans to implement the scheme until it gets back on track,” a DSME official said.
Production workers of DSME, which is living off a bailout program by state lenders, will be required to use all of their annual leave, the official added.
In a desperate bid to keep above water, the shipyard has been pushing for job cuts and other cost-saving measures. DSME had sought to cut its employees by some 20 percent to 10,000 by the end of this year, but has failed to achieve it.
South Korean shipbuilders have been under serious financial strain since the 2008 global economic crisis, which sent new orders tumbling amid a glut of vessels and stiffer competition from Chinese rivals.
In the first half of this year, Daewoo Shipbuilding suffered a net loss of 1.19 trillion won (US$980 million) with its debt ratio exceeding 7,000 percent. Last year, its loss reached a staggering 5.5 trillion won.