According to South Korea's JoongAng Ilbo, the global economy has been sluggish in the past two years, and South Korean companies with poor performance have no choice but to cut expenses and try their best to lay off some older employees.
"I have been working in the company for 18 years, and it is a large enterprise that you are all familiar with, but I didn't expect that I was waiting for this day," said a Korean office worker who did not want to be named, "Our company recently issued an announcement of voluntary resignation, proposing to compensate for several months' salary, so that those of us who have been in the company for more than 10 years will voluntarily resign." ”
Another Korean white-collar worker broke the news: "Our company will not take the initiative to 'fire squid', but let those employees who want them to leave gather at a round table and sit." I don't arrange any work every day, just sit like this, let other employees watch, and after a week or two, naturally someone will leave because of shame. ”
"Even after 10 years of working for the company, I now realize that I am not as important to the company as I thought. A company employee in his 40s sighed that after so many years of hard work, what he was waiting for was a cold notice of dismissal.
On April 23, South Korea's JoongAng Ilbo reported that middle-aged workers over the age of 40, who are the "pillars of South Korea's economy", have decreased by 9.2% in 10 years, becoming an "employment vulnerable group" and gradually being squeezed out of the labor market.
"It's been a harsh workplace winter that is colder than ever. A Korean industry insider sighed.
Employees over the age of 35 were dismissed
SK Group is one of the four largest conglomerates in South Korea, and its company 11st is the second largest e-commerce platform in South Korea. In the midst of the recession, the 11th has begun to encourage employees over the age of 35 to voluntarily resign.
The company announced that employees who are 35 years of age or older and have worked for more than five years will receive a one-time compensation of four months' salary if they voluntarily apply for resignation.
The performance of the 11st in the last 3 years has not been good, and it has suffered consecutive operating losses, and the original planned listing and sale of management rights have also failed.
Regarding this way of retreat, 11st mentioned the word "survival", emphasizing that this initiative "is to support employees to explore the next development path, and it is an effective plan for the company and employees to continue to grow and survive".
Lotte Group's performance is also poor, and its TV shopping company has made personnel adjustments in September last year, dismissing employees who are over 45 years old and have worked for more than five years. This is also the first time that the company has dismissed employees since its establishment.
As compensation, these dismissed employees will receive two years of salary, reemployment allowance and children's education allowance. A company official explained that the dismissal of old employees was in response to changes in the environment.
SPC Group, the parent company of South Korea's Mainichi Dairy and Paris Baguette, also laid off employees in a similar manner in August and November last year, respectively: Maeil Dairy laid off employees over the age of 50, while Paris Baguette laid off employees who had worked for more than 15 years and accepted retirement applications from older employees.
In the financial industry, securities companies such as Hi Investment Securities and DAOL Investment Securities, as well as Woori Bank and NH Nonghyup Bank, also accept voluntary retirement applications from employees.
According to Statistics Korea's Economic Activity Population Survey trends, the number of people over 40 years old in South Korea has been steadily declining over the past decade, and these 40-somethings, who have been pushed out of the job market, are facing a more severe workplace crisis. According to the data, in January this year, the number of employed people aged 40-49 fell by 42,000, declining for 19 consecutive months.
South Korea's JoongAng Ilbo believes that these middle-aged groups are "caught in the cracks" of the labor market, and they are already at a disadvantage in the priority of various government support policies, coupled with the rigid hierarchical wage system, they are very vulnerable to the direct impact of the adjustment of the manpower structure of enterprises.
"These groups are the most economically active and also play a key role in terms of family support and consumption tax payments. If they are out of the job market, the household economy will be hit hard, and crises such as sluggish consumption will ensue. This could lead to the deterioration of the Korean industry and further weaken the motivation of employees. "JoongAng Daily" said.
"Paid leave" and "voluntary separation"
In order to alleviate their own pressure, Korean companies have also proposed "paid leave" and "voluntary resignation".
LG Display, a subsidiary of LG Group, has lost money for six consecutive quarters, reaching a loss of 2.51 trillion won in 2023 and is expected to continue to lose money this year.
In order to reduce wage costs, LG Display has proposed "paid leave", which accepts leave applications from all employees, allows them to take leave for at least 3 months depending on the department, and then pays only 50% of the fixed salary of these employees on leave. And at the end of last year, LG Display claimed that it had received applications for "voluntary retirement" from production workers over the age of 40.
LG Display also announced a "voluntary resignation plan" at its local factory in South Korea, which encourages employees to voluntarily leave their jobs in the form of compensation. According to industry insiders on March 27, LG Display specially held a business environment briefing for employees. In fact, at the briefing on the same day, the company stressed the need to adjust the manpower structure.
According to South Korea's "Financial Times", LG Chem, a subsidiary of LG, has also adjusted its manpower structure after suspending the operation of some factories and implemented a "voluntary resignation" plan.
Regarding this kind of "voluntary resignation" and "voluntary retirement" plans that transmit pressure to employees' workplaces, Lee Ji-man, dean of the School of Business Administration at Yonsei University in South Korea, believes that the labor market in South Korea is relatively rigid, and it is generally difficult to directly fire employees, and the company has to look at the face of the government and other outside worlds to have this way.
Although it is called "voluntary", both the company and the employees know very well in their hearts that this is a disguised dismissal. According to a survey conducted by the Korea National Federation of Entrepreneurs, nearly half (47.8%) of office workers in South Korea left their jobs not on their own initiative, but due to company closures and layoffs.
The pressure of the workplace in South Korea is also reflected in the increase in working hours.
As the largest consortium in South Korea, Samsung has also adjusted its executives because of its poor performance. On April 17, Samsung declared a "state of emergency" to allow executives of its companies to work more hours.
Originally, in June last year, Samsung had just begun to test a new flexible work system, allowing employees to choose three days off a week in addition to weekends. Now that the year has not yet arrived, but because of the dismal performance, it has entered a state of "playing overtime". In 2023, Samsung's net profit will fall by 72%, and the core semiconductor division, under the attack of the two giants TSMC and Intel, will lose nearly 15 trillion won, the first loss in 15 years.
Of course, at present, Samsung's request to increase working hours is only for the senior management team, but ordinary employees are still worried that leaders will pass on the work pressure to their subordinates, and it is very likely that ordinary employees will have to increase their working hours.
Since the beginning of this year, SK Group has changed some of its executive meetings, which were held once a month on weekdays, to two meetings a month on Saturdays. An SK insider, who asked not to be named, said the change forced some lower-ranking employees in non-executive positions to work weekends because they had to prepare reports or documents as required by their superiors.
Migrant workers in South Korea are already feeling the cold wave in the workplace. In a recent survey, nearly half of South Korean migrant workers are worried about losing their jobs or cutting their wages this year.
According to Asia Daily, polling agency Embrain Public conducted a survey of thousands of South Korean office workers on "changes in the economy and workplace employment relations in 2024". According to the data, 45.3% of working people expect to experience layoffs, structural adjustments, salary cuts, and deterioration of employment patterns this year.
Among them, 20.6% of the workers said that "layoffs or structural adjustments" will occur within this year, 15.1% said that "employment patterns such as changing from regular employees to non-regular employees will deteriorate", and 9.6% of the respondents were worried about "salary cuts".
In terms of concerns about layoffs or structural adjustments, white-collar workers (24%), construction (24.1%), catering and accommodation (25.8%) and enterprises with more than 300 employees (26.9%) have a relatively high proportion of employees.
A survey by the Korea General Association of Operators also showed that South Korea's annual salary increase slowed last year, rising by 2.8 percent, well below the 5.2 percent increase in 2022.
(Source: Time Weekly)