More financial, public firms wary of hiring regular employees

SEOUL, Feb. 22 (Yonhap) -- More South Korean financial companies and public firms
plan not to hire new regular employees or will sharply cut payrolls in the first
half, industry sources said Sunday.

A growing number of local companies are facing a liquidity squeeze and are
cutting back on investment amid global slump in consumption, which has dealt a
harsh blow to the export-driven South Korean economy.
According to sources, 14 out of 16 commercial banks will not hire regular workers
in the first half or have not decided yet about this year's employment.
Major securities houses including Samsung Securities Co. said they have no plans
to hire new employees in the first six months of this year and will weigh the
economic and financial situation in making employment decisions for the second
half.
State-run firms said they are not even considering recruiting regular workers in
line with a government drive to streamline the public sector. Conglomerates here
have also been affected.
"Some larger companies may reduce the size of employment, but there are many
firms that did not even set up recruitment plans," an official at the Federation
of Korean Industries said.
The South Korean economy is rapidly heading into recession amid tumbling exports
and sluggish domestic demand. Finance Minister Yoon Jeung-hyun said that the
local economy will likely shrink 2 percent this year, the first annual
contraction since the 1997-98 Asian financial crisis.
Job markets are expected to be further squeezed as the government plans to
decrease employment in the public sector by 25 percent, experts say.
The government is currently encouraging public and private-sector companies to
adopt "job sharing" measures, allowing them to cut the salaries of existing
workers with the aim of employing more people.
In January, South Korea shed 103,000 jobs on-year in January from a year earlier,
the steepest loss in five years, dealing a blow to domestic consumption.
sooyeon@yna.co.kr
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