The nation’s largest steelmaker POSCO is tightening its belt in a desperate effort to restore profitability across its affiliates amid a supply glut and faltering global demand for steel.

In an annual executive reshuffle on Monday, the group said it had cut the number of executives by a whopping 30 percent to 259, compared to 359 last year. 

The group also reduced the number of offices by 22 percent to combine their overlapped tasks and improve efficiency overall.

The decision came a week after POSCO posted its first-ever net loss of 96 billion won ($79 million) last year since its establishment back in 1968.

On Monday, Standard and Poor’s downgraded POSCO’s credit rating to BBB- from BBB+, saying there are no immediate signs of recovery in the company’s business environment over the next 12 months.

“A 30 percent executive cut is huge not just for POSCO but also for other companies here,” Hwang Eun-yeon, the company’s new president, said in an interview with The Herald Business. “That shows our commitment to change.”

Hwang was one of the few executives who were promoted in Monday’s reshuffle across POSCO affiliates. Despite the large-scale executive cut, the group promoted some key men in a move to freshen up the top brass and empower their future roles.

Hwang, 57, has served in diverse positions including POSCO Energy president and more recently marketing chief for POSCO Group. He is also expected to be appointed as an internal director at a shareholders meeting in March.

Chang In-wha, 60, the group’s former steel solution marketing chief, was also promoted to senior vice president to lead the group’s technological investment division.

Now expectations are high, among others, for chairman Kwon Oh-joon, who took office in March 2014.

Until recently, he had to deal with suspicious deals and corruption scandals involving his predecessor Chung Joon-yang. During the months, the group suffered internal feuds while its shares fluctuated.

But he showed confidence in continuing his reform efforts before his three-year term expires next year.

“We will strengthen the competitiveness of our mainstay steel business as a cash cow, while revamping our other business areas for growth,” he said at an investor relations session on Jan. 28. “We will restore profits by adopting extreme cost-cutting measures.”

By Lee Ji-yoon (jylee@heraldcorp.com)