LAYOFFS IN PUBLIC SECTOR

[Anchor Lead]

The government announced on Monday that it will cut 12,000 workers at state-run organizations by 2025 to streamline their structure and boost efficiency. The Yoon administration has been pushing to overhaul state-run organizations, saying that too many jobs at public organizations were created under the Moon Jae-in administration. However, concerns are rising that the move will further toughen the already struggling job market.

[Pkg]

Public institutions are to cut 12,400 workers. That's 3 percent of all employees. It's the first time the public sector will cut jobs in 14 years.

[Soundbite] Choi Sang-dae(2nd Vice minister of Finance and Economy) : "This is necessary to ease the people's burden stemming from excessive workforce expansion, debt increase and plunging profitability and productivity at public institutions over the past five years."

The workforce will be downsized by transferring some of the jobs to the private sector or local governments, as well as merging departments. However, essential safety personnel will be increased. Massive layoffs are expected at big public corporations, such as the KORAIL, KEPCO or the National Health Insurance Corporation. The Korea Expressway Corporation Service will have to let go most workers as a result of work automation. The Korea Hydro & Nuclear Power will only dismiss 37 employees despite its large size, because the corporation is in charge of a state nuclear power project. The government estimates that around 760 billion won will be saved annually through the layoffs. However, there are concerns that hiring will also decline. Job cuts will be carried out over three years through retirements and career change, but most of those subject to layoffs will have to leave next year. A decrease in stable jobs will likely be inevitable, as the government has promised to increase only temporary jobs and internships while minimizing a decrease in hiring.

[Soundbite] Huh Jung-hyun(Job-seeker) : "I am worried because there are more people looking for jobs but fewer openings. With food prices also rising, it would be difficult to find a job that meets my needs."

The government expects only some 100,000 jobs to be added next year, only about 12 percent of this year. The public sector, which has always supported the job market in tough times, is also struggling.