Bank Employees Leaving in Droves Ahead of Downsizing

About 1,300 employees at banks in Korea have or plan to take early retirement given the planned downsizing of the financial sector.

Even younger employees in their 30s are quitting. When the real economy faces its expected slowdown next year, more people in the financial sector are expected to resign.

○ Lower bar for early retirement

A total of 905 employees at five banks have left since September: 320 people at Nonghyup; 298 at Citibank Korea; 193 at SC First Bank; 49 at Pusan Bank; and 45 at Daegu Bank.

If the figures at Kookmin and the Export-Import Bank of Korea are combined, the number rises to around 1,300.

In the past, employees in their late 50s were the only ones to apply for early retirement, but this year, many young employees in their early to mid-30s are doing so at banks.

Among some 350 people who resigned at Kookmin as of Monday, 30 percent were in their 20s and 30s.

The number of voluntary retirees among younger employees has increased because banks have lowered early retirement standards.

Kookmin has cut the number of years an employee must to qualify for early retirement from 15 consecutive years to eight, and Citibank Korea more than 10 years to five.

Nonghyup from this year will allow early retirement for staff higher than level four (manager) and those ranked levels five and six older than age 40.

Young employees say they want early retirement because they either want to focus on childcare or pursue self-development.

A source of Nonghyup said, “Among 30-somethings who took early retirement, women did so to take care of their children while men sought MBAs.”

Another at Kookmin said, “Some left for a job outside of banking, citing the long hours and heavy workload at banks. Others quit to immigrate abroad.”

○ Executives, Non-banking staff facing job cuts

The banks’ drive to downsize is also affecting executives, with a large number at Kookmin, Woori and Nonghyup being replaced.

Kookmin cut the number of business departments covered by its vice president from 13 to 11, and replaced half of its vice presidents. Six of the bank’s 13 vice presidents have left.

Woori cut the number of vice presidents from 11 to 10 and replaced eight of them. Three who were named in December last year were forced to resign after just one year.

Nonghyup also slashed the number of managing executives from 19 to 15, and replaced 10 of them. Since Shinhan and Hana are expected to change their executives, many executives will probably not last their terms.

The non-banking sector is no exception.

Shinhan Card, which offered early retirement for staff with more than two years of service Dec. 10-17, saw 488 employees, or 15 percent of its payroll, leave.

At Daewoo Capital, 150 workers agreed to quit in return for five to 12 months of salary.

Some 30 employees or 10 percent of the workforce at Solomon Mutual Bank, which has offered early retirement since mid-December, have submitted resignation letters.

crystal@donga.com