Government to cut public sector jobs by 2025, first in 14 years

The finance ministry announcing a public sector restructuring plan on Monday during a public institution steering committee. [Photo by Yonhap]

The South Korean government announced a public sector restructuring plan to streamline oversized institutions and save budget by reducing more than 12,000 staff over the next three years by 2025.

A total of 12,442 workers, or 2.8 percent of the 449,000 in the public sector, will be subject to the first restructuring in 14 years, while 4,788 will be reassigned to tasks related to public safety and other divisions that are priorities under the current administration. The plan was approved by the finance ministry on Monday during a public institution steering committee.

The first phase will remove 11,081 jobs next year, followed by 738 in 2024, and 623 in 2025. The government expects to save 760 billion won ($597 million) per year in personnel expenses.

Workers in the public institutions’ payrolls increased by about 110,000 to 443,000 during the former President Moon Jae-in’s five-year tenure that started in May 2017. Labor costs grew by more than 30 percent to 30.3 trillion won in 2020 from 22.9 trillion won at the end of 2016, and total debt at public institutions expanded by 90 trillion won to 583 trillion won in 2021 from 493 trillion won in 2017.