As securities industry is losing its profits, tension between the management and the unions are increasing. (image: Patriotmissile/Wikimedia Commons)
SEOUL, Korea, Mar 10, 2014 (Korea Bizwire) – Under a severe downturn for years, the securities industry is now experiencing an internal discord between the management and the union over the issue of downsizing.
According to disclosure data, the total number of employees in the securities industry as of last year was 40,243, down 5.97 percent (2,633) from 42,802 a year ago. This is 8.65 percent lower than that as of 2011 when the comparable figure was 44,055.
To cope with shrinking business, securities firms have scaled back their sales networks. The number of domestic sales offices has declined 17 percent to 1,534 last year from 1,856 in 2011. Naturally the firms have also cut back on new employee hiring. The total number of new college graduate hires for top-ten securities houses last year was only 273, down 28.5 percent from the previous year. The biggest reason for the firms to tighten their belts is the mounting loss.
According to data from the Financial Supervisory Service, the industry-wide net loss last year was 109.8 billion won. The aggregate net profit for the industry as a whole was 2,265.5 billion won in 2011, followed by 1,240.8 billion won in 2012.
On March 4, a Kyobo Securities board of directors meeting was held to discuss issues such as consolidation of six regional sales offices. But the meeting was thwarted by a protest by the union, which had planned a sit-in in the lobby floor of the headquarters building. The union members broke up after learning that the board of directors didn’t propose the consolidation agenda in the meeting.
Several employees of Daishin Securities held on January 25 a meeting to found a union as a way to counter the management’s effort to cut back on payrolls. But another union was established only a week later, making the securities firm the only one in the industry with two unions. Lately in a bidding to take over Woori Investment & Securities, its union representatives made public its position opposing to the deal.
The union of Hyundai Securities, one of the most combative among securities industry unions, said, “We prefer acquisition by a financially sound domestic firm rather than a foreign-affiliated one,” making it more difficult for the company to select potential buyers.
An executive with a securities firm said, “Before the year’s end, we will definitely see the securities industry with fewer than 40,000 employees. The problem is there is no end of the downturn in sight.”
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