Seoul - Samsung Heavy Industries, one of the world’s leading shipbuilders, is encouraging its employees to use up their remaining paid vacation days as part of its efforts to cut costs, a company official said Tuesday.
More than 4,000 of its employees are scheduled to go on vacation from Tuesday to Friday, and such a move is expected to continue until the Lunar New Year’s Day holiday in February, according to the Samsung Heavy official. Samsung Heavy officials spend their annual paid leave until the end of February and receive compensation in March for days they did not use: “We can save up to 27 billion won (US$25 million) this year by reducing the cost of vacation compensation expenses,” the Samsung Heavy official said. The latest move is in line with the company’s cost-cutting efforts amid the delivery of low-priced ships and fewer orders. Earlier this month, the shipbuilder said it will raise 1.5 trillion won in a rights issue by May to improve its financial status. In 2016, it bagged $500 million worth of orders, accounting for only 10 percent of its target figure for the whole year due to an extended slump in the shipbuilding industry.
The shipbuilding industry, once regarded as the backbone of the country’s economic growth and job creation, has been reeling from mounting losses caused by an industrywide slump and increased costs.