Korea Railroad, Organizational Restructuring Including Regional Headquarters Integration and Field Organization Reorganization

Korea Railroad aims to fully implement a major organizational restructuring starting on the 21st of this month. The restructuring focuses on improving organizational efficiency through the integration of regional headquarters and the reorganization of field units. Photo by Yonhap News

[Asia Economy (Daejeon) Reporter Jeong Il-woong] Korea Railroad Corporation (KORAIL) is undertaking an organizational restructuring with the keywords of regional headquarters integration and field organization reorganization.

On the 3rd, KORAIL announced that to overcome the management crisis caused by the decrease in train passengers due to the COVID-19 pandemic, it will carry out organizational restructuring including ▲restructuring regional headquarters and optimizing field organizations for management efficiency ▲a complete overhaul of the vehicle maintenance organization to strengthen vehicle maintenance functions ▲simplification of management support tasks and workforce efficiency.

First, to improve the efficiency and productivity of railway operations and organizational management, KORAIL will reduce the number of regional headquarters currently operated as 12 to 8.

The four regional headquarters of Eastern Capital Region, Chungbuk, Gwangju, and Daegu will be integrated into Seoul, Daejeon-Chungnam, Jeonnam, and Gyeongbuk headquarters respectively, and the Western Capital Region headquarters will be renamed as ‘Capital Region Metropolitan Headquarters’, Daejeon-Chungnam headquarters as ‘Daejeon-Chungcheong Headquarters’, Jeonnam headquarters as ‘Gwangju-Jeonnam Headquarters’, and Gyeongbuk headquarters as ‘Daegu-Gyeongbuk Headquarters’, with some jurisdictional lines adjusted accordingly.

KORAIL will establish separate management teams in four regions?Daegu, Gwangju, Jecheon, and Eastern Capital Region?to ensure that the expanded jurisdictional scope due to the regional headquarters reorganization does not negatively affect railway field management and safety. These management teams will be responsible for functions closely related to the field such as safety and environmental management, track and overhead line maintenance.

Management stations and small-scale field organizations will also be adjusted considering their management scope. Currently, 81 management stations operate by grouping 655 stations nationwide, but this will be reduced and adjusted to 12 management stations based on management scope and other factors.

Additionally, 66 small-scale field organizations will be reorganized considering train operation frequency and the distance of the assigned area, and in the mid-to-long term, a smart maintenance system will be established in the field.

Furthermore, KORAIL will reorganize 30 vehicle depots under regional headquarters into 4 vehicle maintenance teams to improve vehicle maintenance capabilities and organization operation, and will also pursue slimming down the management support organization including the headquarters.

The slimming down of the management support organization will proceed by eliminating unnecessary management support tasks and unifying similar or overlapping tasks to reduce personnel.

KORAIL expects that this organizational restructuring will improve management through workforce efficiency and enhance safety by strengthening vehicle maintenance capabilities and expertise.

The organizational restructuring is scheduled to be implemented from the 21st of this month after consultations with related agencies, upgrading of IT systems, securing office space, and internal personnel transfers.

KORAIL President Son Byeong-seok said, “In a crisis situation where the future of the institution is uncertain, organizational restructuring such as regional headquarters integration is an urgent task that can no longer be postponed,” adding, “Although the restructuring process will involve considerable pain, we will strive to enhance the efficiency of railway operations through bold innovation and gain trust from the public.”

Meanwhile, KORAIL recorded an operating loss approaching 600 billion KRW in the first half of this year alone due to the sharp decline in train demand following the COVID-19 pandemic. Furthermore, with the recent resurgence of infectious diseases, the cumulative operating loss is expected to increase to 1 trillion KRW by the end of the year.

In this regard, KORAIL already entered an emergency management system in March, formed a management improvement task force (TF), and has been preparing for financial structure improvement exceeding 200 billion KRW and organizational restructuring.

This content was produced with the assistance of AI translation services.