Reducing the shocks

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Reducing the shocks

Large companies are laying off their employees en masse and in a hurry. Full-fledged layoff programs in Korea’s core manufacturing fields such as electronics, automobiles and heavy industries have been activated across the board. Pink slips are even being given to younger workers in their 20s and 30s. Doosan Infracore, a leading machinery company, went so far as to include newly hired employees in the list of workers eligible for buyouts with the ambitious goal of cutting 40 percent of its entire workforce.

After facing a public backlash, Park Yong-maan, chairman and CEO of Doosan Group, ordered a temporary halt to layoffs of the young. Yet, the company presses ahead with its boldest-ever layoffs of other workers in other age groups. Korean workers at major business groups sarcastically say that their companies are willing to lose any workers at all, strong or weak.

The corporate sector says it cannot but resort to layoffs as a means of survival with ever-deteriorating profits due to the global economic slowdown. In fact, the Korean economy is experiencing a precipitous downslide and manufacturers continue to see their sales drop. Our business environment is getting worse since China made inroads into our mainstay products like electronics and smartphones.

But the reduction of employees should be carried out to enhance our companies’ competitiveness, not to merely cut costs. In fact, blue-collar workers from strong unions - the real culprits in our dwindling productivity - were excluded from restructuring campaigns. It’s the office workers who find themselves victims of companies’ relentless layoffs. Under such circumstances, we can hardly expect an improvement in our industries. Our corporate sector is primarily accountable for the crisis, as they have been sitting on their hands in the face of Chinese companies catching up with them. They were not eager enough to find a new, prospective industrial frontier, as seen in the critical lack of determination to seek a new growth engine for further investment.

As Korean companies push forward restructuring at full steam, massive layoffs are inevitable. Some analysts say that our current situation is even harsher than during the 1997 foreign exchange crisis. The shockwaves from layoffs will have a big impact on our society.

The collapse of our middle class in the 1990s still serves as a source of social conflict and the discord we live with today. Our companies must refrain from a totally callous reduction of the number of employees. They must find better ways to share their pain and appropriate systems to absorb the shocks.

JoongAng Ilbo, Dec. 17, Page 38

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