STX offers buyouts to all employees 'out of desperation'

STX Offshore & Shipbuilding dockyard in Jinhae, South Gyeongsang, in 2017. [STX OFFSHORE & SHIPBUILDING]

STX Offshore & Shipbuilding is accepting voluntary resignations as the prolonged Covid-19 outbreak takes its toll on business, the company announced Monday.

The troubled shipyard is offering buyouts to all employees starting on Monday “out of desperation.”

The company said its situation has been aggravated by the stubborn outbreak and a strike that began on May 27. Operations at its dockyard in Jinhae, South Gyeongsang, have been halted since June 17.

The company is accepting the voluntary resignations through July 13. They will receive up to 14 months of wages.

“Despite the long self-restructuring measures, it has become inevitable for us to once again commit with highly intensified self-restructuring measures for the survival as the number of orders and profitability have been hit,” the company wrote to its employees. “It will be difficult to gain competitiveness unless we lower the fixed cost.”

The shipbuilder has undertaken numerous restructuring measures since it agreed to be managed by a group of creditors in 2013. It filed for receivership in 2016.

The company started six months of rotational unpaid vacation in June 2018 as the situation failed to get better.

The shipbuilder reported 8.88 billion won ($7.41 million) in net profit in the first quarter, down 86.9 percent from the same period a year ago. Its sales rose 5.52 percent on year to 104.7 billion won.

BY JIN MIN-JI [jin.minji@joongang.co.kr]