DSME Plans 12,000 Layoffs By 2019

In a press conference Thursday at the firm's headquarters in Seoul, Daewoo Shipbuilding and Marine Engineering CEO Jung Sung-Leep said that DSME would cut 12,000 positions over the next several years as part of restructuring efforts.

“We are planning to reduce the number of employees to a similar level to 2009 and 2010,” Jung said, referring to a time when DSME had a headcount of 30,000. He believes that this is “the optimum number for the company to operate more efficiently and cost-effectively.”

At moment the firm employs 42,000; as recently as 2014 its payroll stood at 55,000, including contractors.

Jung said that the personnel reductions would be gradual, and would start with employees seconded by suppliers.

DSME laid off 3,000 late last year, including 30 percent of its administrative positions at the managerial level or above.

Jung addressed morale at Thursday's conference, suggesting that the firm's remaining staff need to open up and collaborate, rather than defending their positions and digging in. “Only after employees are motivated to work together toward our common goal can we get the company back on track,” he said.

The firm posted massive losses of $4 billion for FY2015, but Jung said that the worst was over, and that the firm had cleared the books going forward. He expressed certainty that the firm would be profitable as soon as the first quarter of 2016, projecting a margin of $400 million.

“A recession in the offshore industry was the biggest factor behind the loss . . . last year,” he said. “But we expect to deliver nine offshore [rigs] this year, although there may be some obstacles in the process. Additional loss or uncertainty in other maritime and wind power projects has almost cleared.”