The chief of Daewoo Shipbuilding & Marine Engineering said Thursday it will slash 12,000 of its workforce by 2019 as part of efforts to revive its struggling core business.

“We are planning to reduce the number of employees to a similar level to 2009 and 2010 when management efficiency was the highest,” DSME CEO Jung Sung-leep said in a press conference at the firm’s headquarters in Seoul.

According to Jung, the nation’s second largest shipbuilder had around 30,000 employees, including vendor firms, and generated 12 trillion won ($9 billion) annual revenue in its boom time.

In 2015, the company posted similar revenue figures, but its workforce jumped to 45,000. As of March this year, the number was reduced to 42,000 following restructuring.

Criticizing the company’s lax corporate culture, Jung said, “Until recently, I have noticed many employees, who are self-centered and built a wall not to cooperate with others. With such a corporate culture, improving productivity is of no use.”

The shipbuilder, however, will not radically slash headcount but will do it gradually over the next few years. For instance, by adjusting the number of employees in its production unit, according to the company’s head.

When it comes to business performance this year, Chung is confident of a turnaround in the first quarter of this year, projecting 500 billion won in operating profits.

“A recession in the offshore plant industry was the biggest factor behind the loss of 5.5 trillion won last year,” he said.

“But we expect to deliver nine offshore plants this year, although there may be some obstacles in the process.

“Additional loss or uncertainty in other maritime and wind power projects has almost cleared,” he added.

Korea’s top three shipbuilding companies, whose global market share reaches more than 40 percent, have recently been struggling due mainly to prolonged low oil prices. Global drilling companies stopped ordering offshore plants and even canceled existing contracts as low oil prices persist.

The three companies reported 8 trillion won in combined losses last year, with 7 trillion won coming from the offshore plant business.

By Shin Ji-hye
(shinjh@heraldcorp.com)