South Korean shipbuilder Samsung Heavy Industries has axed 30 percent of its executives as part of the struggling firm’s latest efforts to prepare for a decline in its business due to a further drop in orders.
Following a reshuffle conducted last week, the firm now has a total of 50 board members, down from 72. It also streamlined the organization from 89 to 67 departments or teams by converging its management.
In addition, the company decided to increase its capital by 1.5 trillion won ($1.41 billion) to enhance its management efficiency.
“Reorganization of the company will help us to regain the title as a company with 43 years of history,” said Samsung Heavy Industries CEO Nam Jun-wu.
Nam listed the stabilization of incoming orders, increased cost competitiveness and successful recapitalization as the company’s goals for 2018.
In December, shares of Samsung Heavy Industries, the world’s third-biggest shipyard by capacity, plunged the most on record. The company said it expects operating losses to reach 490 billion won in 2017 and 240 billion won in 2018. Falling demand for orders and higher raw material costs have led the company to forecast losses for 2017 and 2018, it said.
Former CEO Park Dae-young offered to resign last month to take responsibility for the firm’s losses.