Doosan Infracore carrying out staff cuts

Doosan Infracore, the second-largest affiliate of Doosan Group, has begun a restructuring program to improve its financial health, the group confirmed on Friday.

The country’s 12th-largest conglomerate by assets said Doosan Infracore would cut about 100 jobs through an early-retirement program. The early-retirement offer was given to all 3,200 Doosan Infracore employees, including research and development staff.

The downsizing at the construction equipment maker follows in the wake of a similar program last year by another flagship affiliate, Doosan Heavy Industries & Construction.

Financially struggling sister company Doosan Engineering & Construction also reduced operation costs by cutting staff last year.

“We just want to make clear that this is not a group-wide restructuring,” Bae Gyun-ho, a representative for the group, told The Korea Herald.

Industry watchers forecast the human capital restructuring would increase this year as Doosan Engine and Doosan E&C are reviewing their financial and business portfolios with help from management consultants elsewhere.

But speculation has it that the move is likely to be followed by downsizing. An industry insider told The Korea Herald that Korean companies usually receive outside consulting services before making a decision on restructuring.

Experts say this will likely be Doosan’s largest restructuring effort since it adopted a holding company structure in 2009.

A wave of job losses was expected due to the prolonged business slump of the group, affected by the uncertain global market conditions.

Doosan Heavy, which accounts for about 40 percent of the group’s revenue, is now seeking to offload noncore assets overseas. It has put its Romanian casting and forging company Doosan IMGB up for sale, after years of struggling with deficits.

Doosan Group this week announced it posted 20.4 trillion won ($18.7 billion) in sales in 2014, with an operating profit of 1.8 trillion won.

This was a 5.3 percent fall in sales and 11.2 percent drop in operating profit from a year earlier.

The group’s net profit was 33.2 billion won, down 74.5 percent from the previous year.

By Suk Gee-hyun (monicasuk@heraldcorp.com)