360,000 Temporary Layoffs in SMEs Last Year... 32 Times More Than Large Corporations

Significant Impact on Face-to-Face Businesses Due to Prolonged COVID-19 Pandemic

On the 22nd, as social distancing measures to prevent the spread of the novel coronavirus infection (COVID-19) continue, a store is closing down in a food street in Mapo-gu, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kim Heeyoon] The number of temporary leave workers due to business downturn or suspension in small and medium-sized enterprises (SMEs) surged to 300,000 last year. This figure is eight times higher than in 2019. Compared to the number of temporary leave workers in large corporations for the same reason, it was about 32 times greater.

The Korea Small Business Institute announced on the 22nd that among the 750,000 temporary leave workers in SMEs with fewer than 300 employees last year, 360,000 (48%) were on temporary leave due to business downturn or suspension. The number of people on leave due to business downturn and suspension increased about eightfold compared to the previous year (47,000).

In the case of large corporations with 300 or more employees, there were 86,000 temporary leave workers last year, of which 11,000 (12.9%) were on temporary leave due to business downturn or suspension. While the total number of temporary leave workers in SMEs was 8.7 times that of large corporations, the number of those on leave due to business downturn or suspension was 32.2 times higher, showing a greater gap.

The cause of employment damage in SMEs last year is largely attributed to the impact of high-intensity social distancing measures implemented due to the resurgence of COVID-19, which forced many employees in face-to-face industries such as accommodation, food service, and service sectors to take temporary leave. Furthermore, if this situation continues, there is a considerable possibility that temporary leave workers may turn into unemployed individuals.

Nominsun, head of the Future Strategy Research Group at the Korea Small Business Institute, emphasized, "The fact that the number of temporary leave workers due to business downturn or suspension is at the level of 300,000 clearly reflects the severe economic downturn situation," adding, "Support to maintain their employment must continue."

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