South Korean shipyards, led by Hyundai Heavy Industries Co., slashed their workforces by some 3,000 in 2015 as they struggled with mounting losses stemming from a delay in the construction of offshore facilities and an industrywide slump, industry data showed Monday.
According to the data, some 3,000 employees were let go by the country’s top three shipyards — Hyundai Heavy, Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. — last year.
Including workers at their subcontractors, a total of 5,000 jobs were cut last year, the data showed.
Hyundai Heavy reduced its workforce by 1,300 last year, with some 1,400 workers laid off at Daewoo Shipbuilding.
“Reeling from massive losses, local shipyards reduced costs by slashing their workforces,” a Hyundai Heavy Industries official said.
The shipbuilders are estimated to have racked up a combined operating loss of more than 8 trillion won ($6.66 billion) last year. If the figure hovers around that level, it will mark the first time for all of the nation’s three largest industry players to register operating losses.
Daewoo Shipbuilding’s 2015 operating losses are estimated at about 5 trillion won, with corresponding figures for Hyundai Heavy and Samsung Heavy reaching 1.5 trillion won and 1.7 trillion won, respectively.
In 2014, their combined operating losses hovered above 2 trillion won.
Market watchers expect their business slump to continue this year as the global shipbuilding industry is unlikely to turn around any time soon.
The stuttering shipbuilding sector is feared to be a major drag on South Korea since it is one of the key growth engines for Asia’s fourth-largest economy, along with electronics and automobiles.