Hyundai Heavy Industries Co., the world’s largest shipbuilder, is expected to cut its workforce and streamline the organization as preemptive measures to survive the protracted slump in the global shipbuilding industry.
According to industry sources on Thursday, Hyundai Heavy Industries Chairman and Chief Executive Officer Choi Kil-seon and President and CEO Kwon Oh-gap reportedly decided to implement another massive restructuring at a recent meeting held at its headquarters in Ulsan, Korea after the company already let about 1,500 administrative workers go in a voluntary retirement program in January last year. This time, the company is reported to have decided to cut 10 percent of its total 27,000 employees including those working at dockyards, and some even projected more than 3,000 employees would be subject to company’s workforce reduction plan, according to sources.
Such a decision comes after Hyundai Heavy Industries that incurred a loss of 1.5 trillion won ($1.3 billion) last year mainly due to delays in offshore plant projects saw its business continue to deteriorate this year amid a sharp drop in ship orders. The company has logged 4.79 trillion won in operating loss over the recent two years.
The company is also said to plan to streamline the organization by closing down nearly 100 out of 388 divisions, about 20 percent of the group. The plant and ship design team would be also relocated to the corporate headquarters in Ulsan in southern Korea from Seoul, sources said.
Hyundai Heavy Industries is expected to officially embark on its new stringent self-rescue program as early as next week.