Korean Financial Companies Downsizing; Seoul Stock Falls For 6th Consecutive Day
Financial companies in Korea are downsizing their operations and a number of local employees are rendered unemployed. The reason behind their downsizing is Korean Financial companies are seeking to improve profitability. Seoul stock market is also getting lower closing these days which might be the reason for the move.
Although the financial companies are downsizing their employees, there are many employees who have reached the retirement age. Besides, the lower closing of Seoul Stock market might be another big reason for the companies to protect their operations and maintain profit by downsizing.
As reported by Korea Times, a local consultancy and the Financial Supervisory Service Chaebul.com have stated that the financial companies let go more than 1,700 employees last year. In 2016, the banks, insurers, and brokerages listed on the stock market had 89,483 employees which are around 2% decrease from 2015.
The financial companies are not only downsizing their employees, but they are also cutting their payroll by 970 last year with the number of their employees reaching 36,567. The reports added that Korean finance company Meritz Fire & Marine Insurance listed on the KOSPI has downsized the highest number of employees this year with 316. Mirae Asset Life Insurance is in the second spot that let go 298 employees.
It is possible that the current situation of financial companies is an adverse effect of South Korea Stock market. According to Korea Herald, South Korean stocks closed lower Tuesday, marking the sixth consecutive session drop amid rising concerns over a potential nuclear test by Pyongyang, analysts said.
The reports also included that the Korea Composite Stock price Index fell 9.47 points and close at 2,123.85. The trade volume was moderate at 460.2 million shares worth of 4 trillion won which is approximate $3.5 billion.
The analysts have concerns over a potential clash with North Korea which has been fueled by US's recent air strike against Syria. Is the downsizing of financial companies a result of US airstrike in Syria? Or the employees resigned for better career opportunities?
