Hyundai Heavy Industries (HHI) is asking 5,000 workers to take unpaid leave, starting from September, as it faces a decreasing rate in ship orders until June of next year.
The South Korean company, which is currently the world’s largest shipbuilder, seeks to “persuade” 30 percent of its 17,000-strong workforce to take time off from work without pay, in order to maintain competitiveness amid industry downturn, according to local media.
This means that the leave is voluntary, as the company cannot force its employees to leave. Although the unpaid leave is optional, if it is turned out, the company will subject workers to training sessions, as the union of workers refused a 20 percent pay cut.
As of June, HHI’s backlog of orders stood at only 85, compared to the 110 last year. In addition, it has only 30 ships to work on in the second half of 2017, while it normally has 40 ships per 6 months, making about 5,000 workers idle, according to the company’s statements.
This latest measure is aligned with the shipbuilder’s efforts to cut costs, as it has reported a net income fell in 2016.
Earlier this month, HHI lost the $1.44 billion deal for constructing container ships for French CMA CGM, which offered the contract to China’s Hudong Zhounghua Shipbuilding and Shanghai Waigaoqiao Shipbuilding.
