"Executive salary reduction · Six-day work week"... Business world, enters high-intensity emergency management ahead of second half
Samsung, SK, Lotte, etc., major domestic groups, are further raising the level of emergency management to respond to managerial uncertainty in the second half. With performance deterioration, global demand slowdown, and U.S. tariff risk combined, strong austerity management such as executive salary cuts, 6-day work weeks, and job reallocation is becoming a reality.
According to Korea Exchange, Samsung Electronics has implemented a workforce reallocation called ‘Job Redesign’ in the Visual Display (VD) Division, which has led the world TV market. Emergency management has been implemented since May, and performance incentives are also being reduced. SK On, SK Innovation, SK Telecom, and other major SK affiliates are also strengthening everyday cost control such as freezing executive salaries, reducing domestic travel, and banning golf. SK Telecom has recently launched the ‘Highest Level’ emergency system in response to the recent USIM hacking incident.
Lotte Group has expanded from a voluntary return of up to 30% of holding company executives to chemical subsidiaries, and a CEO ‘Marathon Meeting’ led by the chairman is also predicted. Hyundai Steel has shut down the Pohang Plant No. 2, and Hyundai Oilbank has introduced an executive Saturday work system.
Emergency management is also spreading to voluntary resignations and hopeful retirements at some affiliates. While Lotte Chemical and Shinsegae DF have already undergone restructuring, many groups within the top 20 are said to be maintaining a de facto crisis response system without official declarations.
This atmosphere is interlinked with performance deterioration in the second quarter and worsening outlook for the second half. SK Innovation is predicted to see an operating loss of around 200 billion Won in the second quarter, and Hyundai Motor and Kia are expected to see double-digit profit reductions. The cost pressures due to U.S. tariff risk are likely to become serious in the second half.
According to an Industrial Research Institute survey, the third-quarter sales outlook index of domestic manufacturers has fallen below the baseline (100) for five consecutive quarters, and contracted demand is being detected across core industries such as semiconductors, automobiles, shipbuilding, and steel.
A business circle official said, “With external conditions so poor and the pressure on performance recovery increasing, emergency lights are effectively turned on at all group companies,” and added, “In the second half, restructuring and cost-cutting centered ‘Tightening the Belt’ will be inevitable.”