'Large Deficit' Seoul Subway Considers Voluntary Retirement and Late-Night Service Cancellation

Seoul Metro Initiates Management Rationalization Plan... Internal Discussions Pending
Exploring Workforce Reduction of About 1,000 and Work System Improvements

[Asia Economy Reporter Lim Cheol-young] Seoul Metro is exploring various management rationalization measures, including workforce reduction and the abolition of late-night operations. The scale corresponds to 6% of the total employees. Seoul Metro recorded a net loss of over 1.1 trillion won last year due to the impact of COVID-19, and the deficit is expected to widen further this year.

According to Seoul Metro on the 25th, it is considering measures to reduce about 1,000 employees out of the current workforce of approximately 16,000 by abolishing late-night operations until 1 a.m. and transferring the Bucheon-Incheon section of Line 7 to Incheon Transit Corporation. This move follows Mayor Oh's clear stance since taking office that "it is not appropriate to consider fare increases during the COVID-19 situation. The corporation's self-help efforts must come first."

Additionally, the corporation is simultaneously reviewing cost-cutting measures such as implementing a voluntary retirement system targeting long-term employees and hiring new personnel. Among all employees, more than 56%, or 9,507 people, have worked for over 20 years. After internal review and concluding discussions with the labor union, the corporation plans to consult with the Seoul Metropolitan Government. A corporation official dismissed concerns by stating, "These are matters that require consultation, and nothing has been finalized yet."

The Seoul Metropolitan Government has judged that the corporation's self-help measures to reduce deficits have been insufficient and holds a negative stance on fare increases and the abolition of late-night operations, as these could impose burdens and inconveniences on citizens. In particular, Mayor Oh emphasized at a press conference on the 17th that "fare increases must be premised on cost reductions through management rationalization," adding, "We will give time and opportunity, monitor progress, and then decide on fare increases."

The corporation has recorded losses every year since its establishment. Formed in 2017 by merging Seoul Metro and Seoul Metropolitan Rapid Transit Corporation, it sustained annual net losses in the 500 billion won range for three years until 2019. Last year, due to a 27% sharp decline in transportation revenue caused by COVID-19, the net loss exceeded 1.1 trillion won. Accordingly, Seoul plans to support the corporation with 100 billion won this year, including supplementary budgets, but the shortfall this year is expected to reach 1.6 trillion won, making it difficult to prevent worsening management conditions.

Issuing corporate bonds to secure operating funds is also challenging. The corporation plans to issue a second series of corporate bonds worth 500 billion won in the first half of this year and an additional 700 billion won in the second half, but it is uncertain whether consultations with the Ministry of the Interior and Safety and others will proceed smoothly.

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