Actual Liquidation
Hanjin Shipping, which is under court receivership, has decided to lay off all land-based workers except a small number of employees who will look after the U.S. and Asian shipping routes.
According to shipping industry sources on October 19, Hanjin Shipping’s management recently informed its ground staff labor union of its plan lay off 350 out of 650 employees on land for the U.S. and Asian shipping routes. Once the plan is completed, the number of employees will be reduced by more than half.
The company is said to go with the layoff, not the voluntary resignation that provides a certain amount of compensation. This is because Hanjin Shipping thinks that it is impossible to accept voluntary retirement and offer compensations as it cannot operate its major shipping routes.
The company plans to officially announce the layoff plan early next month and end the legal labor relationship with employees early December. An official from Hanjin Shipping said, “We haven’t decided on workforce reduction plans yet and the company’s management and labor union are currently in negotiations.” The management and labor met at the headquarters in Yeouido on the 20th to discuss the issue.
The union is opposing to the management’s decision. It admits that it is inevitable for the company to cut the workforce as its business network got crumbled and most shippers lost its confidence in the company. However, it still thinks that it is excessive to push ahead with large layoffs since the company is now up for sale.
Meanwhile, 24 overseas subsidiaries whose stakes are owned by Hanjin Shipping more than 50 percent, are also reducing their workforce. About 30 out of 150 employees at the subsidiary in the U.S. left the company, while 200 out of 600 employees at the subsidiary in China resigned from the company. This is largely due to the fact that overseas subsidiaries are cutting their workforce due to the drop in business.