POSCO DX offers voluntary early retirement to better manage its workforce

POSCO DX Co. logo [Courtesy of POSCO DX]

POSCO DX Co., the IT affiliate of steel giant POSCO Group, resumed a voluntary early retirement program on Monday in two years to boost workforce management efficiency, despite its annual sales exceeding 1 trillion won ($754 million) in 2022.

According to industry sources on Tuesday, the IT company’s management and labor union agreed to offer voluntary retirement packages to employees aged 54 or older with severance packages worth 48 months of pay and early retirement package to employees aged between 45 and 53 with severance packages worth 24 to 36 months of pay.

“Voluntary severance and early retirement have been part of our regular human resources policies, as part of measures to help our employees design their new lives after leaving the workplace,” said one POSCO DX official. “The last time we offered voluntary and early severance packages was between 2020 and 2021, on a temporary basis.”

In the first half of 2021, about 10 percent of the workforce, or 180 employees, accepted the company’s voluntary and early severance package. As of December, the company had a total of 2,169 employees.

The proposed early retirement package is believed to be a proactive measure to improve workforce efficiency, not because of any performance issues. In 2022, POSCO DX saw a 32.6 percent increase in sales, to 1.15 trillion won, hitting the 1 trillion won mark for the first time in nine years. The company’s stock more than doubled over the past two months, driven by strong performance.

POSCO DX has a relatively higher number of employees aged 45 and over than other IT companies, which tend to see employees in their 30s and 40s accounting for the largest age bracket. As of 2021, the company had about 980 employees aged 45 and above, which accounted for almost half of the entire workforce.

Along with the severance package, the company also has a six-month program for career change in place starting this year in order to foster talent in new business areas.

Other IT companies suffering from deteriorating performance may also follow the steps of POSCO DX in terms of human resources policies.

“In the U.S., big tech companies use layoffs as a tool to increase workforce efficiency, but here we face somewhat worsening labor flexibility due to the increased presence of labor unions in the IT industry. We need a variety of measures, including flexible working hours,” one industry insider said.