KT Corp., South Korea's No. 2 mobile carrier, said Tuesday it will accept voluntary retirement from senior employees in an apparent bid to tighten its belt as it is dragged down by lackluster performances.
The company said it reached an agreement with its labor union to allow employees who have worked 15 years or more at KT to retire, which accounts for 23,000 of the current 32,000 workers. Applications will be accepted from Thursday to April 24.
This is the first such step since 2009 when the mobile carrier implemented a restructuring program. Around 6,000 workers left at the time.
Those who retire will be compensated with extra pay and a chance to work at KT's affiliates for two years.
The latest retirement program is likely to reduce KT's workforce by nearly 20 percent, industry watchers said.
KT has been suffering net losses amid intensified competition at home against top mobile carrier SK Telecom Co. and third-placed LG Uplus.
Its net loss came to 300 billion won (US$284 million) in the October-December period of 2013, compared with a profit of 106.6 billion won a year earlier, the country's top fixed-line operator said in a regulatory filing in January.
KT said it will also adopt a "wage peak" system by 2015 and cut welfare benefits. A wage peak system allows employees to accept a reduced salary for an opportunity to work past the retirement age set by the company.
South Korea's National Assembly passed a bill in April last year that would make it mandatory for the public sector and big businesses with 300 or more employees to extend the retirement age to 60 from 58 starting in 2016.
KT said it will further beef up efforts to improve its financial health by launching a new supervisory team, which will examine the feasibility of the firm's current and future projects. (Yonhap)