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Doosan chairman backpedals on layoffs

Controversy escalates over voluntary redundancy plan for junior employees

Dec. 16, 2015 - 19:44 By 손지영
Doosan Group chairman Park Yong-maan has ordered Doosan Infracore, the industrial conglomerate’s second-largest affiliate, to exclude junior employees from the company-wide voluntary retirement scheme that has been drawing public criticism.

“I have ordered the affiliate to set up a protective mechanism for new employees (with 1-2 year work experience),” Park told reporters in Seoul on Wednesday. “Though (Doosan Infracore) is facing severe financial strains, new employees will not be subject to the retirement scheme.”

“The chairman took the decision on grounds that it is too harsh to ask employees who have been with the firm for only 1-2 years to leave,” a Doosan Infracore spokesperson told The Korea Herald.

The construction equipment manufacturer began its fourth voluntary retirement program on Dec. 8, seeking to downsize its workforce as part of its continued restructuring efforts to cut costs and reduce debt. The retirement offers are set to continue until Friday.

Unlike the previous early retirement offers to senior-level administrative employees in February and September, and another to all of its manufacturing staff November, Doosan Infracore’s latest retirement scheme was geared at its entire administrative workforce, including young, junior-level staff who have recently joined the firm.

Stoking criticism, a 23-year-old female employee who joined the company last year and several others in their 20s were among those who were urged to leave, according to posts on the company’s online posting board on Blind, an anonymous corporate social networking app.

Even as Doosan Infracore has exempted its junior-level employees from the recent retirement scheme, some younger employees are reportedly discussing whether staying is a good idea through Blind, given reports that those who stay may simply be told to leave again in the next restructuring wave.

At the same time, Doosan Infracore has been emphasizing that the retirements are entirely voluntary. “Whether they want to stay or leave is entirely up to the employees,” said the company official.

As for the junior employees who seem to be feeling more pressured to leave, the Doosan Infracore spokesperson said, “What each employee feels seems to be relative. Those who view themselves as a critical worker for the company may stay while those who feel more anxious or behind may be thinking otherwise.”


Amid escalating controversy, Doosan Group’s flagship slogan “Our people, our future” has been sparking public criticism, with one Facebook user posting that “a company which lays off even its youngest workers holds no future.”

Doosan Infracore has also come under fire for “irresponsibly hiring too many new employees amid foreseen financial hardships, and now asking them to find new jobs in a difficult job market,” according to onlookers.

The construction equipment maker reportedly hired 60 new employees each in 2013 and 2014 and 200 employees each in 2012 and 2011.

The prolonged downturn of the global construction market, particularly China, as well as falling global oil prices have been dealing a major blow to Doosan Infracore’s business standing in recent years.

The company’s net operating profits in the January-September period stood at 224 billion won ($190 million), plunging by around 35 percent compared to the same period last year.

Since its retirement program began in February, around 380 senior-level employees in administrative posts and some 450 employees in manufacturing jobs have left the company -- making up some 15 percent of Doosan Infracore’s total workforce.

“A lot of our senior staff already left the company during the volunteer retirement programs earlier this year. Therefore, we had to expand the retirement scheme to the whole company this time for it to be meaningful in optimizing our operations,” the firm’s spokesperson said.

By Sohn Ji-young (jys@heraldcorp.com)