Allianz Life Insurance Korea has begun its first restructuring in a decade in a desperate effort to break out of a long slump, industrial sources said on Friday.
A 32 billion won ($30 million) net loss in 2012 is prompting the 1,650-staff company to launch a retirement program to cut jobs, the sources said.
It is the first time for the foreign insurer to implement a voluntary retirement program since 2003.
Early this week, company CEO Lee Myung-jae informed all employees that the company could not afford its current labor costs, calling for “a restructuring for survival.”
He stressed that about 58.9 percent of the company reserves were being used on labor costs, far surpassing the local industry average of 41.1 percent.
Allianz Life Insurance Korea is the Korean unit of Allianz Group, the world’s largest insurance financing group, established in 1890.
The restructuring follows similar moves by several local insurers, including Hanwha General Insurance and Hana Life Insurance.
About 70 Hanwha employees recently applied for the early retirement program. Similarly, Hana Life Insurance cut more than one quarter of its 200 employees last month.
Samsung Life Insurance, with the largest number of employees, recently launched “job transfer training” for its employees, which analysts also see as a potential step toward a restructuring plan.
