SsangYong Motor resorts to slashing executives under court receivershipSsangYong Motor, currently under court receivership, said Tuesday it will cut nearly 40 percent of its executives as part of its restructuring measures.
SsangYong Motor has been in the court-led debt rescheduling process since April 15, as its Indian parent Mahindra & Mahindra failed to attract an investor amid the Covid-19 pandemic and worsening financial status.
The carmaker will cut the number of executives from 26 to 16 and "pre-emptively" further reduce their salaries, the company said in a statement.
The executive jobs fell sharply from 35 at the end of 2019, and the company has cut executive and employee wages by 20 percent since 2019 to reduce costs by 120 billion won ($108 million) each year.
It is the second time for SsangYong Motor to be under court receivership after undergoing the same process a decade ago.
Court receivership is one step short of bankruptcy in Korea's legal system. In receivership, the court will decide whether and how to revive the company.
SsangYong Motor filed for court receivership late last year after failing to obtain approval for the rollover of 165 billion won worth of loans from creditors.
Under court receivership, SsangYong Motor's survival depends on whether there will be a new investor to acquire a streamlined SsangYong Motor after debt settlement and other restructuring efforts.