Lotte Engineering & Construction is implementing a voluntary retirement program targeting long-tenured employees and those subject to wage peak arrangements.
The company announced the voluntary retirement plan on its internal bulletin board on the 13th. Applicants will receive severance pay of up to 30 months' base salary depending on years of service. An additional special severance payment of 30 million won ($22,000) will be provided, along with 10 million won per child for education expenses for those with children in university or below. Outplacement consulting services will also be offered to those who opt in.
"This is not simply a workforce reduction but a measure to build a younger, stronger organization," a Lotte Engineering & Construction official said. The company plans to continue new hiring alongside the program. Following the recruitment of 39 new employees in the first quarter of this year, the company will continue hiring new graduates and experienced workers from the second quarter onward.
Construction companies are expected to pursue various self-rescue measures as industry conditions deteriorate and the Middle East conflict continues. Hyundai Engineering implemented voluntary retirement in December last year for the first time since its 2014 merger with Hyundai Amco. DL E&C reduced its workforce by more than 14% last year, primarily among contract workers hired for project sites. Hyundai E&C sent letters last month to housing associations for redevelopment projects in Daezo 1 District in Eunpyeong-gu, Macheon 4 District in Songpa-gu, and Deungchon 1 District reconstruction in Gangseo-gu, requesting increases in construction costs.
According to the Construction Cost Management Center at the Korea Institute of Civil Engineering and Building Technology, the construction cost index rose for six consecutive months to reach a record high of 133.69 in February.
"Companies will be more selective in new projects by carefully evaluating profitability, and if necessary, will shift to crisis management including workforce reductions," said Lee Eun-hyung, a research fellow at the Korea Institute of Construction Policy.
