South Korea’s major oil corporations were pushed to cut wages and downsize their workforce last year, company data showed, after companies endured one of the most difficult fiscal years in the industry, which saw crude oil prices plunge to record lows.

In 2014, the country’s top oil refiner SK Innovation recorded a deficit for the first time in 37 years, while GS Caltex and S-Oil both recorded their largest operating losses to date, according to the companies’ annual business reports released in March.

With such low profits across the industry, the average employee wage fell at the four major Korean oil firms in 2014, compared to the previous year.

GS Caltex saw the largest decline in average yearly wages at 8.8 percent ― from 91.07 million won ($84,000) to 84.02 million won ― followed by Hyundai Oilbank at 6 percent, from 84 million won to 79 million won.

Rival companies saw similar drops, including S-Oil where average wages dropped by 5.2 percent, from 94.6 million to 89.73 million won in 2014. SK Innovation saw a 1.8 percent drop in average wages from 67.14 million to 65.93 million won during the same period.

“Given the difficult conditions in the oil industry (due to recent slumps in international crude oil prices), the company did not dole out any annual bonus to employees,” an official from GS Caltex said.

Some oil firms were pushed to reduce the size of their workforce amid sluggish business conditions. The number of executives and staff at GS Caltex dropped from 3,209 employees in 2013 to 3,156 by the end of 2014.

Hyundai Oilbank also cut the size of its workforce from 1,833 to 1,766 people and SK Innovation from 1,892 to 1,878 during the same period.

“The reduction took place due to internal reshuffling that involved promotions or merged positions, rather than through direct restructuring measures,” the GS Caltex official said.

Though 2014 was a grim year for the local oil industry, business is expected to pick up in the first quarter of this year due to improved refining margins and a recovery in global crude oil prices, according to industry watchers.

SK Innovation is forecast to record about 193.2 billion won in operating profits in the first quarter of 2015, according to calculations by seven market trackers, including Eugene Investment and Securities. Analysts also forecast GS Caltex and S-Oil would record heightened operating profits of around 200 billion won during the same period.

However, skepticism lingers as to whether such improvements in the industry would carry into the second quarter of this year. Oil market analysts forecast a drop in refining margins over the long term. Investments into oil refineries are also expected to surpass stagnant market demands for oil products.

Faced with such possible downturns, Korean oil companies have recently begun carrying out various restructuring measures including selling off unprofitable gas stations or unused properties to increase efficiency and maximize gains.

By Sohn Ji-young (jys@heraldcorp.com)