Acording to a recent survey by the Federation of Korean Industries, 17 out of 29 major business groups in Korea picked restructuring as the center of their business strategy for this year. In contrast, only eight and two chose R&D investment and quantitative growth, respectively.
The Samsung Group already started its restructuring process by selling the fashion business unit of Cheil Industries to Samsung Everland last year. It has merged Samsung General Chemicals with Samsung Petrochemical and sold Samsung Techwin, Samsung Total, and Samsung Thales to the Hanwha Group. At the same time, Samsung Electronics has relocated 15 percent of its employees at the headquarters to different business units, and Samsung Electro-Mechanics allowed some of its manager-level employees to voluntarily retire for the first time in 11 years.
In the meantime, SK Innovation of the SK Group sold SK Petrochemical to SK Chemical while SK Continental was disposed of. The Hanwha Group also sold the construction material division of Hanwha L&C last year, and Hanwha Life Insurance let hundreds of employees go in 2014 alone. Doosan Infracore of the Doosan Group has received applications for voluntary retirement since Jan. 30. Hyundai Heavy Industries has received similar applications from those at the manager level and higher since last month, too.
All this rushing to downsize is because of concerns over a long-term recession. Out of the 29 groups, 24 answered that they were concerned over the likelihood of a structural and long-lasting recession, whereas the other five said that the current recession is temporary. Twenty-one of the surveyees mentioned the recent business conditions are similar to, or worse than, those during the global financial crisis of 2008.
