From Small and Medium to Large Firms, Domestic Securities Companies Face a Wave of Layoffs

Wave of Voluntary Retirement Among Regular Employees... Senior Executives Also Resigning One After Another
Contract Renewals Fail... Number of Contract Workers at Securities Firms Expected to Plummet Below 10,000 Next Year

Yeouido Securities District, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Lee Seon-ae] The restructuring wave in the domestic securities industry is intensifying. Executive-level generational changes are taking place to address poor performance, organizational renewal, and workforce efficiency. While voluntary retirement among regular employees is surging, contract workers are even more unsettled. Due to the nature of securities firms, which have many one-year fixed-term contract employees, non-renewal of contracts is becoming widespread, especially in departments with deteriorating profitability. Workforce reductions are actively occurring mainly in sales divisions with a high proportion of contract workers, including corporate finance (IB), corporate, and bond sectors.

According to the securities industry on the 13th, KB Securities is accepting voluntary retirement applications until the 15th. Eligible candidates for voluntary retirement are regular employees born on or before December 1, 1982. Until recently, small and medium-sized firms with low financial soundness ratios, especially those focusing on real estate project financing (PF), have proactively reduced staff, but concerns in the industry are growing as even the large securities firm KB Securities is undertaking restructuring. KB Securities insists that this is a pure voluntary retirement, but industry observers see it as a move to control fixed expenditure costs.

Restructuring at small and medium-sized securities firms is progressing rapidly. Hi Investment & Securities accepted voluntary retirement applications until last week for employees born in 1967 or earlier, with 20 years of service and grade 2 department heads as targets. These candidates reportedly account for about 50% of all regular employees. Ebest Investment & Securities is also reducing staff in the IB division. Cape Investment & Securities has discontinued related businesses by abolishing the corporate division (corporate sales) and research division due to sluggish market conditions. Among about 30 employees in these departments, some were excluded from contract renewal and left the company. Daol Investment & Securities accepted voluntary retirement applications from regular employees last month.

Many senior executives are expected to leave Yeouido. Hi Investment & Securities targeted employees born in 1967 or earlier, and at Daol Investment & Securities, all executives at the managing director level or higher in management-related roles have already submitted resignation letters taking managerial responsibility. A securities industry official hinted, "Restructuring targeting senior executives is active due to poor performance and market conditions."

The number of contract employees in the securities industry is expected to sharply decline. According to the Korea Financial Investment Association, as of the end of the third quarter, there were a total of 38,254 employees at 36 domestic securities firms. Among them, 11,377 were contract employees, accounting for 29.74% of the total. One in three securities firm employees is a contract worker. The number of contract employees in domestic securities firms surpassed 10,000 for the first time in the first half of last year and maintained an upward trend, but it is now expected to fall below 10,000. When adverse factors such as a stock market downturn and PF-driven capital market tightening hit, contract workers are the first targets of restructuring, and steady reductions are anticipated. Daol Investment & Securities did not renew contracts for all six members of the bond structuring team last month. A securities industry official said, "Most contract employees’ contract renewals are concentrated in December, so non-renewals will be active this month."

As of the end of the third quarter, Leading Investment & Securities had the highest contract employee ratio at 74.84%, followed by Korea Asset Investment & Securities (70.23%), Heungkuk Securities (65.22%), Cape Investment & Securities (62.83%), Meritz Securities (60.41%), Hanyang Securities (55.49%), Daol Investment & Securities (52.79%), and Hana Securities (51.05%). Most are IB sales personnel focused on real estate PF. Since the number of contract employees, which was in the 9,000 range as of the end of March last year, sharply increased to over 10,000 during the market boom, a decrease now would highlight workforce reductions even more.

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