KT plans massive voluntary retirement

By Korea Herald
  • Published : Apr 8, 2014 - 21:14
  • Updated : Apr 8, 2014 - 22:20
KT said Tuesday that some 70 percent of its workforce will be asked to voluntarily leave their jobs at Korea’s second-biggest mobile carrier, as it seeks to boost efficiency and improve lackluster earnings.

This is also in line with efforts by KT’s new CEO Hwang Chang-gyu, a former CEO of Samsung Electronics’ semiconductor unit, to “rejuvenate” the company with younger staff and rebuild it completely.

The company said that its managers and staff agreed to the restructuring plan, which includes options allowing them to work for KT’s affiliates for two years after their voluntary redundancy.

Some 23,000 senior employees who have worked for KT over the last 15 years will be subject to the company’s restructuring, the largest reorganization since 2009, when the telecom company laid off about 6,000 workers.

They can either chose to completely retire or work for affiliates KT M&S or ITS, where they will be able to plan their post-retirement while receiving monthly salaries, in addition to severance pay from KT.

“Those with marketing and sales backgrounds can go to M&S, while technicians and engineers can work for ITS,” said a KT spokesperson.

KT M&S engages in sales and distribution of KT’s mobile and fixed-line telecommunication services, while ITS is an information technology solution provider.

KT’s chief executive has been aggressively moving to restructure the company and its divisions since he was appointed early this year and declared a state of management emergency.

His plan includes reducing the number of executives from 130 to 100, and reviewing and reorganizing all of its businesses as well as those of its subsidiaries.

“As mentioned during the general shareholders’ meeting (last month), CEO Hwang said it planned to proceed from square one,” the spokesperson said.

This included liquidating non-core assets to increase efficiency.

The company said, however, that this would be its final restructuring of human resources.

In the second half of the year, the company will hire more than the 300 young employees it usually recruits as it seeks to become “younger and more lively.”

KT said it will accept voluntary redundancy applications from its employees between April 10 and 24, and let them go by the end of this month.

KT posted a net loss of 60 billion won ($57 million) last year, according to a regulatory filing.

By Park Hyong-ki (