Last year, SK Telecom, KT, and LG Uplus reduced their workforce by about 10%. This suggests that even strong telecommunications companies are tightening their belts due to stagnation in their main telecommunications business.
According to the business reports of the three telecommunications companies released on the Financial Supervisory Service's electronic disclosure system on the 21st, the total number of employees at the three companies as of Dec. 31, 2024, was 32,991, a decrease of 8.7% compared to the previous year (36,140). In detail, KT's reduction in employees was the largest. Last year, KT had 16,927 employees, down 14.2% from 19,737 the previous year. The number of employees at SK Telecom (5,493) decreased by 1.5% and LG Uplus (10,571) decreased by 2.3% compared to the previous year.
The industry's assessment is that the reductions in workforce are significantly influenced by market conditions. In a saturated domestic telecommunications market, it has become difficult to expect further growth, compounded by the economic downturn resulting from high inflation and high interest rates. The combined revenue of the three telecommunications companies last year was 58.997 trillion won, an increase of just 1.07% compared to the previous year. The combined operating profit of the three companies was 3.496 trillion won, a decrease of 20.6%. It is the first time since 2020 that the combined operating profit of the three companies fell below 4 trillion won.
The telecommunications companies are focusing on streamlining their organizations by drastically cutting unprofitable businesses. Last year, SK Telecom shut down its pet healthcare platform "Petdok." KT discontinued services such as the virtual human video content production platform "AI Human Studio," the navigation service "One Navigation," the metaverse service "Geniverse," and the non-fungible token (NFT) platform "Minkul." LG Uplus halted services for the K-pop content platform "Idol Plus," home training content service "Home Training Now," and the freight transportation brokerage platform "Freight It Go."
Telecommunications companies are even reducing investments in their main telecommunications network facilities to cut costs. Last year, SK Telecom's capital expenditure (CAPEX) was 1.544 trillion won, down 11.4% from the same period the previous year. During the same period, KT's capital expenditure decreased by 4.6% to 2.2999 trillion won, while LG Uplus recorded capital expenditure of 1.9 trillion won, a 24% decrease from the previous year.
Kim Kyung-won, a distinguished professor at Sejong University’s Department of Business Administration, noted, "The fact that even strong telecommunications companies have begun to reduce their workforce is evidence that the domestic economic situation has worsened." He added, "The reduction in existing business staff may have also aimed to secure personnel for new businesses like AI."
In contrast to the number of employees, there were differences in the number of executives among the three telecommunications companies. Last year, SK Telecom had 94 non-registered executives, a decrease of about 17% compared to the previous year (114). LG Uplus had 64 non-registered executives, a decline of about 10% compared to the previous year (71). In contrast, KT actually increased the number of executives. Last year, KT had 99 non-registered executives, an increase of about 27% compared to the previous year (78). A KT official explained, "This was because they hired experts in related fields to accelerate AICT (AI + ICT) business."