January 13, 2025

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KT to Establish KT OSP and KT P&M in Major Restructuring Move

KT to Establish KT OSP and KT P&M in Major Restructuring Move

KT CEO Kim Young-seop


 In a significant move under the leadership of CEO Kim Young-seop, KT Corp. is set to undergo a major restructuring, including the establishment of two new subsidiaries and the implementation of its first large-scale voluntary retirement scheme. The telecommunications giant, which has been a cornerstone of South Korea’s telecommunications infrastructure, is poised to make these changes to streamline operations and focus on core competencies.


KT will hold a crucial board meeting on Oct. 15 to finalize the decision on the establishment of the subsidiaries, tentatively named KT OSP and KT P&M. These entities are expected to be officially established on Jan. 1 next year, with KT holding 100% of the shares. The move is part of a broader strategy to optimize workforce and enhance operational efficiency.


The restructuring plan involves reallocating employees involved in field operations, such as line and power management for telecommunications and broadcasting facilities, as well as those in customer contact centers. A total of 3,780 headquarters employees are expected to be transferred to the new entities. KT OSP will have an initial capital of 71 billion won and will employ approximately 3,400 personnel, while KT P&M will start with 10 billion won and around 380 employees. Additionally, about 170 customer contact center employees will be reassigned to KT IS or KT CS.


KT plans to offer special voluntary retirement payments ranging from a minimum of 165% to a maximum of 208.3% of the standard severance pay. The maximum severance payment for voluntary retirement is reported to exceed 300 million won, which is the highest level compared to the current KT severance pay rate of 135.3% to 153.7%. The total number of employees affected by the reallocation and voluntary retirement could reach up to 5,700. If the plan is realized, the number of KT headquarters employees will be reduced from around 18,000 to about 12,000.


The reallocation of affected employees is expected to begin as early as this month, with voluntary retirements starting next month. Despite the detailed plans, KT has stated, “Nothing has been decided yet,” refraining from further comments.


Kim Young-seop, who took the helm as CEO in August, is steering KT through this significant transition. The move aligns with global telecommunications industry trends towards digital transformation, AI, and information and communication technology (ICT). By establishing subsidiaries focused on network operations and management, KT aims to become an AICT specialized company, better positioned to navigate the evolving market landscape.


Voluntary retirement schemes are a common practice in South Korea, offering financial incentives to employees who choose to retire early, thus reducing workforce size without resorting to layoffs. This approach is part of KT’s strategy to optimize its workforce in response to changing market conditions and strategic shifts.

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