Restructuring boom among Foreign IT companies

Foreign communication equipment companies in Korean market are in process of corporate restructuring.

The reason is due to world wide economic recession in the Information Technology (IT) industry and emergence of third generation mobile communication service called the IMT-2000. Some companies are downsizing due to this.

On July 8th according to the industry news, Eriksson Korea has laid off nineteen of its employees. At first the company planed to lay off sixty-one out of its eighty-seven employees by September but the employees formed a union and demanded a negotiation with the company. Therefore the number of layoffs was reduced and ten employees have already left voluntarily.

One veteran employee said, "The company has recruited thirty experienced employees in last year on a account that they will win the bid for the SK Telecom`s IMT-2000 but when they lost the bid this year, they immediately started restructuring" and "Currently the layoffs numbers to nineteen but they might increase it anytime according to their original plan", he worried.

The atmosphere in the Motorola Korea is also uneasy. Recently, the Motorola head office in the U.S. has announced 7% downsize in their overall employees, which amounts up to seven thousand. That might also affect Motorola`s branch in Korea. "Everyone is on their toes to see whether the Korean branch is in their downsize list," said one employee.

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The IT industry is in recession and until the mobile telephone service reaches its fourth generation stage there will be no work. The restructuring is unavoidable. Even if the skilled workers want to move to other companies, there is no place to go, as none of the companies are recruiting," said one communication industry source.

Im-Sook Ha artemes@donga.com