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S.Korea's large companies to reduce employment in 2015

Xinhua, March 16, 2015 Adjust font size:

South Korea's large companies plan to reduce employment this year, refraining from hiring young job seekers amid higher labor costs and extension of retirement age, a business lobby data showed Monday.

The top 30 South Korean companies by assets plan to employ 121, 801 workers in 2015, down 6.3 percent from a year earlier, according to data by the Federation of Korean Industries (FKI). The employment sank 10 percent in 2014.

Among the 30 companies, 19 will reduce their hiring of workers as the government extended retirement age amid the aging population. Labor costs were increased as a court ruled an expanded range of basis salary, resulting in higher severance pays and overtime allowances.

In early March, Finance Minister Choi Kyung-hwan stressed the need for a rapid minimum wage hike to boost the sluggish domestic demand, triggering strong opposition from businesses. Such comments may have caused large companies to reduce employment.

The top 30 corporations plan to invest a total of 136.4 trillion won (120 billion U.S. dollars) this year on facilities and research and development (R&D), up 16.5 percent from a year earlier.

Money earmarked for facilities investment would increase 19.9 percent from a year earlier to 102.8 trillion won in 2015, with the figure for R&D rising 7.4 percent to 33.6 trillion won. Endi