Restructuring and rationalization have become a must for Korean companies across the industry.

Posco, top steelmaker, set out to cut general expenses by 30 percent this year amid a slowdown in global steel demand. The company managed to save 120 billion won ($103 million) in the first six months of this year by improving its operational efficiency and seeks even greater savings next year. The steelmaker would also sell off non-core assets, as it projects a tougher year ahead.

LG Display, world’s second largest display maker having the worst year since its foundation, replaced chief operating officer and has launched a massive early retirement program, taking applications from even office workers for the first time in 12 years or since 2007-2008 global financial crisis. The company has been grappling with snowballing losses, which are estimated to reach 1 trillion won this year.

Koo Kwang-mo, chairman of LG Group, convened a special executive meeting in September, where he demanded a change in management for survival. He said the next few years would decide the future fate of the company as they face challenges completely different from what they had experienced before, such as an L-shaped slump.

Samsung Electronics has been running a series of emergency executive meetings since June as its mainstay semiconductor business as well as display and consumer electronics took a hit from the global slowdown.

SK Hynix has announced it would cut capital investment next year as a cyclical downturn turned out to be worse than expected. It is the first time for the company to cut capex since 2008. Chey Tae-won, chairman of SK Group has said he has never seen a geopolitical crisis shaking the business this hard, referring to the mounting challenges from economic slowdown to protracted U.S.-China trade war, an economic standoff with Japan, and market uncertainties linked to North Korea.

Retail giant Lotte Group is revising its business strategy to prepare against growing challenges. The group reportedly has ordered its units to cut spending plans.

Local airliners are under even greater challenges due to sharp contraction in travel demand to Japan, which had been top travel destinations for Koreans before the standoff over past wartime and trade issues began this summer on top of intensifying competition. The country’s largest full-service carrier Korea Air Lines for the first time in its 50-year history has invited employees to take voluntary short-term leave, with its operating loss amounting to 101.5 billion won in the second quarter. No.2 airliner Asiana Airlines, put on the sales block amid a liquidity squeeze, has been running a voluntary retirement program this year. Low-cost carriers including Jeju Air and Tway Air have been reducing their flights.

Shipbuilders that have been undergoing massive restructuring since 2015 are still struggling for survival amid a dearth of new orders. The big three shipyards – Hyundai, Daewoo, and Samsung – already have slashed 40 percent of their workforce, with more layoffs expected to take place. The shipbuilding orders have been picking up since last year but the growth is still too weak, with the level still hovering about half of their target.

Local carmakers have been rationalizing factory lines and workforce as they turn idle.

Renault Samsung Motors has been taking applications for voluntary retirement from production line workers, with the deadline extended from initially planned September. Mando, an automotive parts maker, laid off 20 percent of its senior executive manager including co-chief executive officer Song Bum-suk.

By Special Report Team (Kang Gye-man, Won Ho-sup, Chun Gyung-woon, Lee Jong-hyuk, Song Gwang-sup, Park Yun-gu) and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]