Kim Hyun-bin began his journalism career at Arirang TV from 2012 to 2017, specializing in defense, foreign affairs and the economy. In 2018, he joined The Korea Times, covering society and business, and is currently responsible for embassy affairs.
KT to trim workforce through retirement
KT releases video call application for hearing impaired people, Monday. Courtesy of KT
By Kim Hyun-bin
By Kim Hyun-bin
KT, the country's largest telecom company, will have around 20 percent of its workforce retire by 2024, which experts believe will become an opportunity for the company to cut costs and further increase investment in its core businesses and future technologies.
When KT was first established in 1981 under the name “Korea Telecom Authority,” the state-run company conducted a large-scale recruitment to match the government's efforts to enhance the country's information technology business.
Reports show that starting last year, 530 personnel who were first employed in the early 1980s retired, 710 people are set to follow this year, while an additional 1,000 people are scheduled to retire each year through 2024.
A total of 4,700 employees will leave within the next five years, which accounts for around 20 percent of the current 23,000 KT workforce.
The CEO nominee Koo Hyun-mo has also brushed off the need to conduct a restructuring of the firm as there are thousands set to retire in the coming years.
“The issue of downsizing and retirement is a sensitive issue for any firm and usually kept a secret. I am not sure how the stats have come to be released,” a KT official said.
KT CEO Nominee Koo Hyun-mo is expected to be officially nominated on March 30 at the general shareholders meeting, and will be able to start fresh without going through a major personnel restructuring to cut costs, which previous CEOs had to initiate.
Often, major companies engage in restructuring after a new CEO takes over, but for Koo the downsizing will come naturally.
When KT was privatized in 2003, 5,505 people were laid off and again 5,992 people were let go in 2009 under late-CEO Lee Suk-chae. Through the restructuring the company was able to save around 460 billion won ($382.4 million) each year in personnel expenses.
In 2014, then-CEO Hwang Chang-gyu received voluntary resignations of employees who had worked for over 15 years, which resulted in 8,000 people leaving the company.
Despite cost-cutting, some experts worry it could drastically reduce the number of experts and specialists at the firm.
However, some industry watchers believe the savings could become fuel for investments in other rising technology sectors, including artificial realty (AR), virtual reality (VR) as well as the IPTV sector, where the other two major telecom companies ― SK Telecom and LG Uplus ― are heavily investing in through mergers and acquisitions.
Experts believe new growth opportunities heavily rely on how swiftly KT acquire technologies and personnel that suits the Fourth Industrial Revolution including 5G, AI, big data and Internet of Things (IoT). The three telecom companies became the world's first to commercialize 5G networks last April, which enable firms to create diverse and seamless content.
KT has integrated its VR segment with its 5G technologies in a wide array of fields, including ultra-high definition video streaming, and medical and educational content. KT also introduced the world's first 8K VR streaming service last month.
Following their merger, KT and KT Skylife lead the pay-TV market with 31.2 percent (10.22 million subscribers), followed by LG U+ and LG Hello Vision at 24.6 percent (8.06 million), and SK Broadband and T Broad with 23.9 percent (7.83 million).