Doosan Infracore, the second largest affiliate of South Korean industrial giant Doosan Group, has recently asked junior-level employees with less than four years of work experience to retire voluntarily as part of its restructuring efforts, according to an internal source.
“Corporate executives had summoned the junior staff members individually in the second week of September and some of them left the firm en bloc on Sept. 14,’’ an insider of the construction equipment maker told The Korea Herald under the condition of anonymity.
“This all happened in less than a week. People are taking the offer seriously even though they know it’s hard to find a new job amid poor job market conditions,” the 32-year-old employee at Doosan Infracore said.
“Corporate executives had summoned the junior staff members individually in the second week of September and some of them left the firm en bloc on Sept. 14,’’ an insider of the construction equipment maker told The Korea Herald under the condition of anonymity.
“This all happened in less than a week. People are taking the offer seriously even though they know it’s hard to find a new job amid poor job market conditions,” the 32-year-old employee at Doosan Infracore said.
Furthermore, the source added that efforts to cut salaries of employees are also underway to lower its debts.
As of the end of the second quarter, the debt ratio of the construction equipment provider soared to 292 percent.
The prolonged downturn of the Chinese construction market and falling oil prices have dealt a blow to profits of Doosan Infracore.
The company’s operating profit plunged 11.7 percent on-year to 128.5 billion won ($108.6 million) and sales plummeted 6.3 percent to 1.78 trillion won in the second quarter.
The firm enjoyed its heyday in the early 2000s, buoyed by fast growing demand in China. In 2001, the firm’s China sales hit 2 trillion won, but the figure fell sharply to nearly 800 billion won last year.
Due to the staggering profits, the company implemented a voluntary retirement scheme last month. Under the program to cut 200 workers above manager levels, almost half of the executive-level officials were said to have left the company.
Despite the self-rescue programs, including job cuts at all levels, Doosan Infracore has been seeing its stock price nosedive recently, from this year’s highest of 13,500 won in March to 6,590 won last Friday.
SK Securities on Tuesday expected the firm’s third-quarter operating profit to plunge 44.7 percent to 54.9 billion won.
The brokerage firm also lowered the firm’s target stock price to 10,000 won from 13,500 won, mentioning poor sales of construction equipment in emerging markets including China.
By Suk Gee-hyun (monicasuk@heraldcorp.com)
