[Exclusive] Ministry of Economy and Finance to Reduce Staff for the First Time in 10 Years

2024 Ministry of Economy and Finance Headquarters Staff Reduced from 1298 to 1255
Annual Average Growth of 2% Reversed to Cut
Aligning with 'Small Government' Presidential Policy
"Temporary Units to be Organized, Re-request if More Staff Needed"

The Ministry of Economy and Finance, which serves as the control tower for economic policy and is responsible for the nation's finances, will reduce its headquarters staff for the first time in 10 years. The reduction rate is the steepest among major ministries. This move, following a significant downsizing of public institution staff, is seen as the Ministry setting an example and aligning with the Yoon Suk-yeol administration's national philosophy of a "small government."

According to a comprehensive report by Asia Economy on the 7th, the Ministry of Economy and Finance's headquarters staff for next year has been tentatively set at 1,255 people. This is a reduction of 43 people (a 3.3% decrease) from this year's 1,298. This is the first time the ministry has cut staff since 2014, when the number decreased from 1,122 to 1,108 in 2015, a reduction of 14. Since then, the ministry's staff has steadily increased by an average of 2.0% annually. Personnel expenses based on staff numbers increased by 4.6 billion KRW (5.6%), from 82.1 billion KRW to 86.7 billion KRW during the same period.

Among the 26 ministries headed by ministers or higher, the Ministry of Economy and Finance has the largest staff reduction. The ministry with the second-highest reduction rate is the Ministry of Employment and Labor, with next year's staff set at 8,535, which is 267 fewer than this year. The reduction rate is 3.0%, 0.3 percentage points lower than that of the Ministry of Economy and Finance. Other ministries with staff reductions include the Korea Communications Commission (-2.3%), the Fair Trade Commission (-2.3%), the Ministry of Unification (-1.7%), the Ministry of Gender Equality and Family (-1.6%), and the Financial Services Commission (-1.0%), all with reduction rates below 3%.

Looking at the Ministry of Economy and Finance's staff by rank for next year, Grade 4 (Senior Secretary) will decrease from 267 to 245. Grade 4 positions are mainly department heads and team leaders who are the primary decision-makers for major policies. Grade 5 (Administrative Officer), who perform practical tasks, will also decrease from 559 to 541. In contrast, the Senior Executive Service, comprising Grades 1 and 2, will increase by 2 to 59. Grade 7 will increase by 29 to 84, while Grades 8 and 9 will be adjusted to 31 (-33) and 23 (-1), respectively.

The largest portion of the staff reduction at the Ministry of Economy and Finance is due to the termination of temporary organizations. Twenty people assigned to the "Next-Generation Budget and Accounting System (D-Brain) Construction Promotion Team" were removed from next year's staff. The promotion team was temporarily launched in July 2019 and worked on linking 7,890 various indicators with fiscal data. After operating for about three years, the project is now in its final stages, leading to a natural decrease.

Aligning with President Yoon's 'Small Government' National Policy

President Yoon Suk-yeol attended a discussion hosted by the Gwankun Club at the Press Center International Conference Hall in Jung-gu, Seoul, on December 14, 2021, when he was the People Power Party's presidential candidate, and said, "We aim for a small and efficient government." [Image source=Yonhap News]

Despite the Ministry of Economy and Finance's staff rarely decreasing, the unusual reduction this time is rooted in the Yoon Suk-yeol administration's national philosophy of a "small government." President Yoon has emphasized since his candidacy and after his election in cabinet meetings and strategic meetings that "public institutions must become small but efficient," and that "the number and salaries of public officials must be managed under strict standards." Unlike the Moon Jae-in administration, which expanded the number of public officials, he has indicated intentions to freeze staff numbers and streamline the numerous committees scattered across the public sector.

The Ministry of the Interior and Safety, which oversees public official staffing, reported last July in a presidential briefing that the national public official staff would be frozen and that each ministry would reduce its staff by 1%. In June, it also issued organizational management guidelines to local governments to reduce general public official staff by 1% annually and reallocate for new demands. The Ministry of Economy and Finance also implemented strong staff reductions in its affiliated public institutions. According to the "Public Institution Innovation Plan 2023 First Quarter Implementation Results," 10,721 staff were reduced across 291 public institutions by the first quarter of this year, accounting for 96.8% of the planned reduction of 11,072 for the year.

It is believed that it would not have been easy for the Ministry of Economy and Finance to increase its internal staff as before. Doing so would contradict the government's national philosophy and expose the ministry to criticism for increasing its own staff while leading public sector staff reductions. A ministry official hinted, "The internal workforce situation is not so relaxed that we can afford to reduce staff," but added, "The Ministry of Economy and Finance should also show that there are no exceptions to staff reductions."

However, the staff reduction at the Ministry of Economy and Finance is not expected to immediately cause a shortage of personnel available for work. Another ministry official explained, "This is a reduction in authorized staff, not actual personnel, and we first organized temporary teams. If there is a demand for personnel even in the second half of the year, we will respond by requesting ad hoc organizational restructuring, so there is no problem."

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