Kyobo Life Insurance, the nation’s third-largest life insurance provider in terms of assets, is set to start downsizing its organization amid persistent lagging performance to follow in the footsteps of the other two market leaders, Samsung Life Insurance and Hanwha Life.
The company announced on Thursday that it would receive voluntary redundancy from employees who have worked there for 15 years or more, starting Friday until June 9.
Applicants will be paid a lump-sum retirement allowance equivalent to 42 months’ worth of basic wages, along with funds of up to 20 million won ($19,500) per applicant to cover education costs for their children.
Of the 4,700 employees, almost half have over 15 years of service and are thus eligible for the voluntary redundancy, though the number of retirees has not been fixed yet, according to officials.
For years, local insurance companies have been struggling with a negative margin, having to pay out to customers an amount higher than their net profit ― a phenomenon caused by the persisting slow economic growth and low interest rates.
In April, Samsung Life Insurance raised alarms in the industry by laying off over 1,000 senior employees, including 20 percent of its executive board. Hanwha, too, implemented restructuring for the first time in five years.