Seoul Metro's Snowballing Deficit, Proposes '1539+α' Staff Cuts to Union... Union Opposes as "One-Sided Sacrifice"

Work System Changes, Partial Outsourcing, and Efficiency Improvements Lead to 1,539 Staff Reductions... Additional 432 Cuts Due to Night Service Abolition
Mayor Oh Se-hoon Orders 'Prior Management Rationalization,' Company Prepares Self-Help Measures... President Kim Sang-beom Says "Difficult but Inevitable for the Corporation"

The labor and management of Seoul Metro held the main negotiation on the afternoon of the 8th with negotiation members from both sides in attendance. (Photo by Seoul Metro Labor Union)

[Asia Economy Reporter Lim Cheol-young] Seoul Metro, suffering from astronomical deficits, has presented a workforce reduction plan to cut about 1,500 employees to the labor union. The corporation has been preparing self-help measures following Mayor Oh Se-hoon's prior management rationalization orders. However, with the union opposing this workforce reduction plan, considerable difficulties are expected in finalizing the self-help measures.

According to Seoul Metro on the 9th, the management proposed a self-help plan to reduce 1,539 employees during this year's wage and collective bargaining negotiations held at headquarters on the 8th. This accounts for more than 9% of the corporation's total workforce of about 16,000 employees. The management calculated that workforce reduction could be achieved through changes in work systems, outsourcing operations, and abolishing late-night services.

Specifically, it estimated that 587 employees could be reduced by changing work types such as introducing a non-overnight work system, 521 employees by integrating transfer stations' operations, and 431 employees by outsourcing non-core tasks. Additionally, it expected to reduce another 432 employees by abolishing late-night operations, a measure previously proposed to Seoul City as part of the self-help plan. Late-night extended operations are currently suspended due to COVID-19.

The management also proposed a wage freeze. Given the massive deficit of 1.1 trillion won last year due to the COVID-19 impact and an expected deficit of several hundred billion won this year, they consider it unavoidable. Seoul Metro was established in 2017 by merging Seoul Metro, which operated lines 1 to 4, and Seoul Metropolitan Rapid Transit Corporation, which operated lines 5 to 8. Since its inception, it recorded annual net losses of around 500 billion won until 2019, with even larger deficits last year.

In response, the union strongly opposed the proposal, calling it unilateral. They argued that the deficit widened last year due to a 27% drop in transportation revenue caused by COVID-19, and that the fundamental causes are the subway fares, which have remained unchanged for six years, and free rides amounting to several hundred billion won annually. Therefore, they claim that large-scale workforce reduction is a one-sided sacrifice.

During negotiations the previous day, Kim Sang-beom, CEO of Seoul Metro, stated, "To overcome the severe financial crisis, the city, government, and corporation have no choice but to come together and reach an agreement," adding, "It is difficult, but we ask for understanding that this is inevitable for the corporation." However, the union strongly protested, saying, "They are ignoring the essence of the financial difficulties and blaming the workers," and the first negotiation ended after about 20 minutes. The union particularly noted, "When asked whether the self-help plan was voluntary or directed by the mayor, the management replied that 'the city requested stronger self-help measures and asked to meet external expectations,' acknowledging the strong pressure from Seoul City."

Kim Dae-hoon, the union chairman, emphasized, "We can never accept restructuring self-help measures that tighten the noose on workers and threaten safety," and warned, "If the restructuring plan is unilaterally notified and enforced, extreme confrontation and conflict will be unavoidable, and the responsibility lies clearly with the city and the corporation."

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