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DSME to cut workforce by 20% this year

[THE INVESTOR] Daewoo Shipbuilding & Marine Engineering will speed up its restructuring process by shedding thousands of jobs by the end of this year amid growing concerns of a possible liquidity crisis, according to the firm on Oct. 12.

“We are pushing for a swift and intensive self-rescue scheme including reducing jobs to under 10,000 within this year,” DSME said in a press release.

This means that the financially troubled shipbuilder will cut over 20 percent of its work force, or nearly 3,000 positions, from current 12,700. 




In January, the company said it would lay off 1,200 employees over the next five years but it advanced the schedule as its order book has been shrinking faster than expected this year and its expiry dates of corporate debt come near.

The company has some 940 billion won (US$836.89 million) worth debts that expire between April and November next year. Industry watchers said it is expected to suffer a severe liquidity shortage of 3.3 trillion won by 2020.

As a part of its facility downsizing effort, the embattling shipbuilder could dispose its three remaining floating docks after reviewing business and market conditions, the firm said.

Previously, the shipyard sold two of its five floating docks.

By Park Han-na (hnpark@heraldcorp.com)
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