Gov’t to reduce employee number of public institutions

Public organizations are to reduce the number of their employees starting from next year and to cut current costs and operating expenses by more than 10 percent latter half of this year. They are also asked to downsize areas such as accommodation management that compete with the private sector and to sell irrelevant overseas businesses as well as memberships for golf clubs and resorts.

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho approved the reform guidelines for public institutions under the new Yoon Suk-yeol administration" during the Public Institutions Operation Committee meeting held in the Seoul government complex on Friday. Choo said during the meeting that the public sector should set an example in tightening its belt and take the initiative in driving sweeping reforms. He added that the new administration will no longer tolerate inefficiency and ineffective management of public organizations.

The government has asked 350 public institutions to establish reform plans in five areas - organization and personnel management, budget planning, functions, asset management and employee benefits and welfare – and submit them by the end of August. This means that the public institutions should reduce the number of their employees starting from next year. They need to cut down on excessive number of managerial positions and integrate similar positions doing similar jobs under indistinguishable titles such as Vice Chairman, Head of Department or Director General. However, on concerns over possible cuts in new hires, Second Vice Minister Choi Sang-dae for Economy and Finance responded that the employee volume will be reduced.

On top of that, public organizations need to cut operating expenses as well as major current costs including management and travel expenses by more than 10 percent respectively for the latter half of this year. In 2023, current costs must be decreased by more than 3 percent year-on-year and operating expenses by more than 10 percent. They need to sell non-essential assets such as golf club memberships and scale down their spacious office spaces.

The organizations need also to downsize irrelevant business areas such as accommodation management or intellectual property eval‎uation, which may be more apt for the private sector. However, the ministry stated that the government doesn’t have any plans to privatize those institutions.


Hye-Ryung Choi herstory@donga.com