The reduction of workers is the largest since September 2010, when the number of workers at such companies reduced by 60,000 amid a tight job market in the wake of the 2008 global financial crisis, the data showed.

In January, payroll size in the manufacturing sector declined by 160,000 on-year, recording the lowest in more than seven years, according to the data.

On the other hand, new hiring by smaller firms with four employees or less, which mainly include self-employed businesses like restaurants, spiked by 122,000 last month, growing at the fastest clip since the 127,000 tallied for August 2014.

Such a sluggish job market came as South Korea's manufacturing sector, one of the country's mainstay fields, has been suffering a serious setback after major shipbuilding and shipping companies underwent a painful restructuring process due to financial strain.

Hanjin Shipping, previously the nation's No. 1 shipping line and the world's seventh largest, was liquidated Friday, as a local court declared it bankrupt after it failed to resolve its debt problems.  

Meanwhile, political uncertainties surrounding the country's top conglomerates, in relation to an influence-peddling scandal involving President Park Geun-hye and her friend, have been cited as reasons for big firms' reluctance to recruitment down the road.

Only SK Group, the third-largest conglomerate in Korea, has unveiled a plan for some 8,200 new positions for this year, while no other players are yet to provide details on fresh recruitment.

No. 1 conglomerate Samsung Group's recruitment plan has remained in limbo since its de facto chief Lee Jae-yong was arrested last week on bribery charges in relation to the president's scandal. (Yonhap)