Six public-funded banks to cut more workers

Six banks that received public funds at the end of last year, namely Hanvit, Seoul, Peace, Kwangju, Cheju and Kyongnam, will be forced to make additional cuts in their labor forces if they fail to meet their targets for operating profits per capita by this July.

According to the memorandum of understanding (MOU) that the six banks signed with the Korea Deposit Insurance Corp., the banks must conduct additional restructuring of their labor forces if they fail to meet the targets in the corporation's twice yearly inspections.

Considering that Shinhan Bank, which boasts the nation's highest labor productivity, recorded 220 million won in operating profits per person, the target for these banks is estimated to reach 160 to 200 million won, a relatively high level.

The labor unions of these banks delayed the presentation of written agreements on restructuring last year because they felt unable to accept another round of layoffs this year, following one last year. Seoul Bank fired 650 employees and Hanvit 1,100 employees last September.

A Seoul Bank official said that the bank would do its best to meet the target but added that the possibility of failure could not be ruled out. He predicted that an additional labor cut was inevitable as the MOUs reflect the government's strong will to reduce the labor forces at local banks before placing them under financial holding companies.