South Korean shipbuilding giant Hyundai Heavy Industries (HHI) has laid off 25 per cent of its executives as a first step within the framework of its massive job-cutting plan, expected to include up to 3,000 jobs.
HHI embarked on an ambitious restructuring plan in 2014 which is expected to include slashing of 10 percent of its workforce as part of its self-help measures this year aimed at reducing company costs and returning to profit.
The cuts were revealed by the company earlier today, with HHI’s affiliates expected to follow suit, the Korea Times reported citing the company’s spokesman.
The latest round of cost-cutting measures follows a 42.2 percent fall in new orders at the company for the first quarter of 2016 year-on-year, with only five orders in the bag.
The company’s shipbuilding business took a big blow with 63.2% lower orderbook reaching USD 234 million in Q1.
Previous restructuring measures included letting go of HHI’s top brass and relinquishing of salaries by the company’s CEOs who have been returning up to 50 percent of directors’ salaries.
According to HHI, the unions are not happy with cost cutting measures and are reluctant to cooperate with the company as they are seeking pay increase.
Drastic cost cutting measures have enabled HHI to conclude its first profitable quarter after nine quarters of posting losses recording an operating profit of KRW 325.2 billion (USD 283.2m).
World Maritime News Staff