President A, who runs a software development firm with about 20 employees, recently let one developer go. As corporations cut IT spending and new projects, revenue fell and labor costs mounted. The company had planned to keep staff and prepare to develop a new service, but as even its capacity to invest shrank, it ultimately decided to reduce headcount. President A said, "I want to hire again when the economy recovers, but right now even keeping the current staff is a burden."
The mood in the small and midsize corporations job market is troubling. On the surface, employment at micro corporations is rising, but the story changes as the size gets a bit bigger. While employment is increasing at corporations with one to four employees, the number of workers at corporations with five to 299 employees is falling. Even within small and midsize corporations, a split is emerging in employment.
Legally, small and midsize corporations are categorized by criteria such as revenue by industry, but in the job market, corporate size is divided by the number of workers to examine hiring trends. Typically, corporations with fewer than 300 employees are classified as small and midsize corporations, and those with 300 or more as large corporations for comparison.
According to the Korea SMEs & Startups Institute (KOSI) "KOSI small and midsize corporations trends, August issue," in July 2026 the number of workers at corporations with one to four employees was 10,227,000, up 210,000 from a year earlier. In contrast, employment at corporations with five to 299 employees was 15,466,000, down 166,000.
The gap is even clearer in recent months. Employment at one to four-employee corporations kept rising from 10,177,000 in May to 10,214,000 in June and 10,227,000 in July. By contrast, five to 299-employee corporations fell for three straight months, from 15,558,000 in May to 15,524,000 in June and 15,466,000 in July.
In large corporations with 300 or more employees, July employment was 3,444,000, up 65,000 from a year earlier.
Head counts rose at "very small corporations," but are slipping at corporations that employ somewhat more staff.
The issue is that corporations with five to 299 employees are not merely "mid-sized corporations." This range includes corporations that have established their operations to some extent, add staff, expand production and sales, and have the potential to grow into mid-sized or large corporations. Because of that, the decline in employment at these corporations is seen as a signal that the ladder of growth for the Korean economy is weakening, going beyond a simple hiring cutback due to a sluggish economy.
Jeong Yun-jeong, associate research fellow at the Korea SMEs & Startups Institute (KOSI), said, "The rise in employment at one to four-employee corporations reflects, in part, growth in one-person founders and livelihood- or micro-scale enterprise hiring, but the decline at five to 299-employee corporations warrants attention because it shows corporations in the growth phase are unable to add people," adding, "If corporations in this range cannot expand head count and investment, the growth path leading to mid-sized and large corporations itself could weaken."
The government is also stressing the need for support tailored to each stage of corporate growth. The Ministry of SMEs and Startups presented "building a growth ladder for small and midsize startups" as its policy direction for the second half and said it will strengthen stage-by-stage support from startup to growth.
Experts note that the focus of small and midsize corporation support policies should now shift from "how many corporations were supported" to "how much the supported corporations grew."
Yoo Hyo-sang, head of the Unicorn Management and Economy Research Institute, said, "Increasing the number of startup corporations matters, but it is more important to help them maintain employment and expand investment as they grow to 10, 30, and 100 employees," adding, "In particular, to prevent a prolonged decline in employment at five to 299-employee corporations, financial, workforce, sales channel, and investment support should be tightly linked to each growth stage."