Hyundai Heavy Industries to cut jobs, sell assets worth around $1 bn

Hyundai Heavy Industries Co yesterday said that it would cut jobs and sell assets worth around $1 billion, as the world's largest shipbuilder by revenue struggles to cope with slump in demand.

The second round of restructuring comes a month after the South Korean giant's decision to reduce 25 per cent of senior executives workforce and cut overall executive pay by as much as half.

Hyundai's latest announcement is part of its plan to reduce debt and increase liquidity. It will submit the new restructuring plan this week to a group of creditor banks led by KEB Hana Bank.

The company did not reveal where and how many jobs will go, but South Korean newspaper MoneyToday said the shipbuilder plans to cut 3,000 jobs, or nearly 10 per cent of its total workforce and sell about 1 trillion won's ($855 million) worth of stocks it owns, and other assets such as golf memberships and property and buildings.

A Hyundai officer said, ''Along with the 25 per cent cut of senior managers last month, the voluntary retirement plan we announced today is essential for our management rationalization measures in preparation for rapidly decreasing orders.''

South Korea's shipbuilding industry has taken a hit of billions of dollars and in the process run huge debts after clients from the oil industry cancelled orders due to low oil prices, which have fallen more than 50 per cent over the past two years.

''With new orders drastically shrinking, we are now making our utmost efforts to steer our company toward new reforming measures that will address the current crisis. However, HHI's business portfolio is well diversified with various businesses such as engine and machinery, electro electric systems and construction equipment. As our shipbuilding and offshore plant businesses accounts for less than 50 per cent of our entire revenue, HHI is less exposed to risks related to the shipbuilding business.