Job losses in finance industry hits 5-year high

As low inflation and growth pummeled profit, Korea’s financial industry has shed its largest number of jobs in five years, government data showed Wednesday.

Statistics Korea said there were 840,000 workers in the local finance sector in the January-November period last year, down 2.8 percent from the previous year. The figure translates to a loss of 24,000 jobs over the 11-month period, marking the steepest fall since 2009 when 55,000 jobs were lost in the midst of the global financial crisis.

The number of jobs in the finance industry accounted for 3.13 percent of the local job market in November, falling to its lowest level in more than five years since July 2009 when it reached 3.12 percent.

Analysts say the data shows that the finance industry is struggling to make sufficient profits, as interest rates run low and stock trading remains tepid.

Combined shares of financial companies listed on the local bourse also slipped 5.4 percent from January to September 2014, according to the agency.

To cut costs, financial companies have been downsizing their organization and cutting employees. Small brokerage houses were put up for sale but have not found buyers.

A recent survey by the Korea Development Institute showed that 70.6 percent of CEOs at 34 brokerage houses said that only 20 to 40 securities firms out of more than 60 in the industry will survive in the next few years.

Banks have also been moving to shutter their brick-and-mortar branches and shift to digital banking in order to reduce overheads. Some 270 branches were closed last year, while major lenders such as Kookmin, Nonghyup and Shinhan plan to close more branches this year.

Life insurers have also laid off their employees to stay afloat, with big players such as Samsung, Hanwha and Kyobo, as well as smaller players Mirae Asset and ING all shedding workers.