South Korea's top 30 business conglomerates have agreed to reduce the wages of university graduates employed by them this year in an effort to stabilize the job market, Yonhap News reported quoting the nation's largest business lobby group Wednesday.

The conglomerates, including Samsung, Hyundai Motor and LG, will slash annual wages for their new employees by as much as 28 percent, the Federation of Korean Industries said in a statement.

"Businesses wisely agreed to lower wages to overcome the serious crisis in employment," Chung Byung-cheol, vice chairman of FKI, was quoted as saying. "The agreement is also aimed at enhancing job-sharing efforts."

The money saved from the lowered wages will be used to hire more interns and part-time workers, he said.

Last week, the government said it would cut the annual salary for college graduates at 297 state-run companies.

South Korea's economy, Asia's fourth-largest, is widely expected to fall into its first recession in 11 years, hammered by the deepening global economic slump.

The government has predicted the economy would shrink by 2 percent this year, while the International Monetary Fund forecast a 4-percent contraction and Swiss brokerage firm Credit Suisse predicting a contraction of as much as 7 percent.

In the final quarter of 2008, the Korean economy contracted 3.4 percent from a year ago, the Bank of Korea said.