Order slump cost builders 2,200 jobs in two years

Korea’s large and midsized construction companies have slashed about 2,200 jobs over the past two years, data showed yesterday, as dwindling orders amid the protracted euro zone debt crisis hurt their profits.

The Financial Supervisory Service, which oversees regulatory filings by listed companies, said 26 of the top 100 builders carried out the restructuring between 2011 and 2012 to cut costs.

GS Engineering & Construction, Korea’s fourth-largest builder, has chopped 229 jobs while Hyundai Development, the country’s eighth-largest builder has trimmed 38 people, according to their financial data posted on the Web site of the financial regulator.

Midsized builders such as Poonglim Industrial and Pumyang Construction carried out the lion’s share in work-force reduction. Poonglim Industrial shed 260 jobs while Pumyang Construction saw its work force drop to 92 from 281, according to the Web site of the financial regulator.

The job cuts came as a prolonged property market slump showed no signs of easing in Korea. Lawmakers have failed to extend temporary tax cuts for those who buy homes, which led to a drop in transactions.

Many Koreans appear to be unwilling to buy homes out of concerns that housing prices could drop further in coming years. The development has led to piles of unsold apartments, which in turn hit profit margins of local construction companies grappling with dwindling orders.

The move has prompted Korea’s major construction companies to expand their overseas operations to try to find new profit sources.

Daewoo Engineering & Construction, the country’s third-largest builder, has vowed to make inroads into the Latin American and southern African markets in addition to the Middle East and Southeast Asia.

Korean builders hope to clinch overseas orders worth more than $70 billion this year, according to the International Contractors Association of Korea.

Korean builders won overseas orders worth $64.9 billion in 2012, up 9.8 percent from a year earlier, according to the Ministry of Land, Transport and Maritime Affairs.

Yonhap