Multinational companies are expanding their support into other emerging Asian markets while reducing support for and organizations in Korea, due to Korea’s slowing IT growth.
The “Exit Korea” trend is expected to deepen for a while, putting a dent in Korea’s status as an IT test bed.
According to a related industry source on April 7, last year Hewlett Packard Co. got rid of the promotion department in Korea, handing its responsibilities over to its Asia Pacific Division.
HP Korea’s promotion department had been subdivided into three, but was reintegrated due to lackluster business, and was completely dissolved last year. HP is known to have restructured their promotion departments in 13 countries where growth was stagnant.
IBM also handed over IBM Korea’s sales and marketing portion to IBM Asia Pacific (AP) in Singapore at the beginning of this year.
So far, IBM Korea had been treated as one of the major growth markets, but now IBM AP is managing it together with other countries.
In addition, many smaller multinational IT companies in Korea have been minimizing their support departments or restructuring them to be handled by their AP or Japanese offices.
One associate who has been working at a multinational IT company over 10 years said, “The IT companies are moving their resources and personnel to other emerging markets such as Vietnam from Korea where growth has stalled. Some Korean branches were downgraded into simple offices where only essentials are being taken care of.”
Some companies are downsizing through mergers and acquisitions (M&As) among IT companies.
Company acquisitions such as Oracle taking over Sun Microsystems and IBM selling its server department to Lenovo affects the overall IT human resource market in Korea.
M&As between companies or company departments inevitably result in downsizing in personnel and support departments due to the reduction in organization and staff.
Contrarily, some domestic organizations shrink because of globalization of domestic companies.
Intel Korea handed over relevant operations to the headquarters upon expansion of their business in Samsung Electronics. Intel Korea provides CPUs to local PC companies.
One associate in the multinational IT industry said, “Just a few years ago, when I attended a company event, overseas IT people were eager to know what was happening in Korea, but the attention is shifting to Indonesia or Vietnam. Exit Korea will be exacerbated among multinational companies except mobile ones due to Korea’s IT stagnancy and global recession.”