Stung by persistently low oil prices that prompted foreign orders to dry up, South Korean construction firms have been preparing for restructuring plans, according to company officials Wednesday.

POSCO E&C, a construction arm of steelmaker POSCO, plans to cut 500 jobs by the end of this year via a voluntary retirement program.

In the first half of the year, POSCO E&C reported a loss of 177.1 billion won ($161.6 million).

POSCO E&C saw sales fall by more than 1 trillion won in the first six months of the year, compared with the same period last year.

"The voluntary retirement program is part of a groupwide restructuring plan and aimed at pre-emptively dealing with a slump in the construction business," a POSCO E&C official said.

POSCO is said to have considered merging POSCO E&C with another construction affiliate, POSCO Engineering, to boost efficiency. If the planned merger goes ahead, POSCO Engineering would cut about

600 jobs.

Daewoo Engineering & Construction Co., another major construction firm, plans to announce restructuring measures, including a voluntary retirement program, in November.

With the order book for offshore plants becoming empty, Daewoo Engineering is expected to scale back its business division for overseas plants.

"A merger of sluggish business divisions, such as foreign power plants, is expected to take place," a Daewoo Engineering official said.

Samsung C&T Corp., a unit of the country's top conglomerate Samsung, has already conducted a voluntary retirement program, cutting its total workforce to 7,084 people in June from 7,952 people at the end of last year. 

Overseas construction orders had once accounted for as much as 70 percent of total annual sales of a major construction firm in South Korea.

But the plunging price of oil has taken its toll.

According to industry data, the value of foreign construction orders won by South Korean firms stood at $18.4 billion so far this year.

If the trend continues, South Korean firms may win about $30 billion worth of foreign construction orders this year, which would be the smallest amount since 2006. (Yonhap)