KT may halve payroll by 2020

By Kim Yoo-chul

KT headquarters in Pundang

KT is considering a rationalization plan to halve the number of its employees by 2020, sources said Monday.

Currently, KT employs 32,334.

“When you look at KT’s entire corporate size, it is too big to catch up with the industry trend,” a KT executive said.

He said on condition of anonymity that the company needs to bring it to the level of its mobile rival SK Telecom in terms of efficiency. SK Telecom employs just over 4,000 regular workers.

He said the company’s top management has reached a broad consensus to improve efficiency via restructuring.

“It is our rule to make that reduction by attrition,” he said, ruling out massive layoffs.

The official added that details remaining undecided.

KT’s smart work system is a way of increasing efficiency with a smaller workforce.

Smart working is an approach that embraces new technological possibilities to allow operations from any location.

Some 4,000 KT employees use this system.

According to the semiannual reports filed by carriers to Financial Security Service (FSS) in August this year, KT’s biggest local rival and the nation’s top mobile carrier SK Telecom has 4,027 employees with the firm spending 133 billion won on salaries, while KT spends 922 billion. Workers for the former receive 33 million won and the latter 29 million on average a year.

Observers point out that the biggest obstacle for the telecommunication giant has been its established corporate culture as a once public enterprise.

The firm became a private company in 2002, but many say the deep rooted culture of being a public company remains.

The government-backed National Pension Service (NPS) is the majority shareholder with over 6 percent, while telecommunication services are a back-bone industry that is heavily constraint by government regulations and policies.

There have been unscrupulous appointments to head KT, including the most recent nomination of Lee Suk-chae as the chairman, which many speculate to be politically motivated.

The merger of fixed-line operator KTF and mobile carrier KT into one unified entity has also posed a serious problem despite Lee’s insistence that the two firms have united well. Employees say the two differing backgrounds often collide in the workplace.

“The two very different company cultures have been at odds since the merger. Those from KTF and KT form cliques and don’t mix well,” said another employee, who worked for the wireless division of the firm before the merger.

“Those who use to work in KTF are more rigid, old-school and group together well. Those with a KT background are more individualist. They don’t get along well.”

She said that an employee’s background of working in either company also affected promotions and bonuses.