Nearly 4 in 10 listed firms cut workforce in 2021 amid pandemic

Almost 4 in 10 South Korean listed companies trimmed their workforce in 2021 from a year earlier amid the prolonged coronavirus pandemic, a private think tank said Tuesday.

The Korea Economic Research Institute (KERI) said a survey of 1,874 firms listed on the country's main and minor bourses showed 43.1 percent slashing the number of their employees last year from 2020.

Of the 696 businesses traded on the main KOSPI market, 294, or 42.2 percent, cut jobs during the cited period, with 43.6 percent of the 1,178 firms registered with the tech-heavy KOSDAQ market reducing their payrolls.

The proportion of job-cutting listed companies in 2021 was down from 52 percent in 2020 and was also lower than 44.3 percent in 2019 before the outbreak of COVID-19.

KERI, the research arm of the country's conglomerate lobby Federation of Korean Industries, attributed the on-year drop in job-reducing firms to their improved performances bolstered by a recovery in demand and brisk business by "untact" sectors.

Yet their total workforce has yet to recover to pre-pandemic levels, the institute said.

As of the end of December last year, their total headcount stood at 1.483 million, up from 1.469 in 2020 but down from 1.497 two years earlier.

Hit by the pandemic, nearly 27 percent of those companies pared down their workforce in 2021 for the second consecutive year.

On top of job cuts, 210 firms, or 11.2 percent of the total listed companies, suffered setbacks in sales and operating income due to the coronavirus fallout, according to KERI.

The think tank called on the government to push ahead with corporate deregulation and provide tax incentives in a bid to induce local companies to invest more and expand employment.