South Korea's KT has cut nearly 6,000 jobs – around 16% of its workforce – in its largest ever headcount reduction.
The company said it had arranged for 5,992 employees to take early retirement, in a drive to shave 460 billion won ($393.8 million) from annual salary expenditures.
But KT estimates that the early retirement program will cost around 870 billion won in one-off expenses, and that some of the cost savings will be offset by increased outsourcing costs and new hires.
The cuts will become effective on December 31. After the cutbacks, KT's workforce will be reduced to around 31,000 employees.
About 65% of the retirees are in their fifties, and the employees have worked for KT for an average of 26 years.
KT is in the process of merging with its mobile unit KTF, and hopes to save an additional 500 billion won from the consolidation.
KT has been experiencing an escalating decline in wireline revenue. Fixed telephony revenue fell 6.3% year-on-year in Q3, while internet revenue slumped 7.5% over the same period. The company meanwhile lost 10% of its PSTN subscribers, ending the quarter with 18.5 million.
KT stock on the Korea Exchange fell 0.61% to close at 40,700 won yesterday.