Seatrade Maritime is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Loss-making DSME to dismiss another 12,000 employees

Loss-making DSME to dismiss another 12,000 employees
Loss-making Daewoo Shipbuilding & Marine Engineering (DSME) has announced a painful decision to further axe another 12,000 staff over the next two years, the shipbuilder’s ceo Jung Sung-leep was reported saying.

“In 2014, we had 55,000 workers generating KRW16trn ($13.3bn) in sales. But the size of the workforce was way too big. So we downsized it to about 42,000,” Jung told The Korea Times.

“But we still have a way to go because we have to bring it further down to 30,000, which I think is the optimum number for the company to operate more efficiently and cost-effectively.”

Jung, who was present at a press conference held in Seoul on Thursday, added that the staff redundancies will also affect those employees dispatched from partner firms.

He recalled that from 2009 to 2010, DSME recorded profits with a 30,000 workforce. In 2015, the shipbuilder booked a massive loss of KRW5.13trn, reversing from the profit of KRW33bn in 2014.

“I believe that we should maintain the 2009-2010 level to overcome the current difficulties. We will try to downsize the workforce by first dismissing those dispatched from our partner firms,” Jung was quoted saying.

The ceo also highlighted concerns of falling employee morale, and he pledged to make efforts to revive their interest in getting the company back on track.

On a positive note, Jung projected that DSME will post operating profits in the first quarter of 2016, and aim to win new orders worth $10.8bn this year.

“We reflected all the losses, mostly from the unprofitable offshore plant business, in our balance sheet last year,” he said. “Our full-scale restructuring over the past year has significantly improved our operational efficiency and labour productivity.”