Top 50 Kospi firms increase workforce despite fall in profit in H1

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Amidst a downturn in operating profit, South Korea’s top 50 companies listed on the Kospi have managed to expand their workforce by over 13,000 employees. Despite the ongoing semiconductor market chill, industry giants such as Samsung Electronics Co. and SK hynix Inc. have led the way with nearly 8,000 net new hires. Additionally, lithium battery-related manufacturers such as LG Energy Solution Ltd. and POSCO Future M Co. created thousands of new jobs.

According to the semiannual reports released on Wednesday by each company, the total operating profit of the top 50 Kospi companies (excluding financial firms) for the second quarter amounted to 14.13 trillion won ($10.54 billion), down 62 percent from 37.22 trillion won reported a year ago.

In contrast, the combined total number of employees across the 50 companies was 571,328 as of the end of June, which is an increase of 13,554 from the previous year’s 557,774. Despite the challenges in the semiconductor industry, the hiring efforts of Samsung Electronics and SK hynix, which accounted for nearly 8,000 of the new hires, contributed to this growth.

Samsung Electronics, boasting 124,070 employees as of June 30, added 6,166 employees over the past year, securing its leading position in net hiring. SK hynix rose to third place by adding 1,622 employees to its workforce.

The decision of major semiconductor companies to hire significantly amidst deteriorating financial performance suggests their proactive preparation for the upcoming market upturn, some experts said. Securities market analysts are also optimistic about the potential for improved operating performance and stock prices among semiconductor companies.

“Samsung Electronics is expected to experience a strong stock performance in the latter half of the year as its technological competitiveness in areas like HBM and Double Data Rate 5 (DDR5) gains recognition,” said Park Yoo-ak, an analyst at Kiwoom Securities. “Additionally, improvements in the semiconductor industry, such as securing large new customers in the foundry sector, will support its stock price increase.”

The lithium battery industry, which has emerged as the country’s next growth engine, also helped create jobs by adding thousands of employees.

LG Energy Solution, for instance, increased its workforce by 1,688 employees in just a year, recording the second-largest net hiring numbers following Samsung Electronics. Other secondary battery-related companies, including POSCO Future M (740 employees), Samsung SDI (659 employees), SK innovation (230 employees), Korea Zinc (191 employees), and Geumyang (55 employees), added over 3,500 new positions collectively.

Some companies downsized their staffing levels due to organizational changes, such as the workforce reduction of 1,242 employees at Hanwha Solutions. Other examples include KT (746 employees), LG Electronics (594 employees), Naver (567 employees), Samsung Electro-Mechanics (380 employees), and Korea Electric Power Corporation (372 employees).

Meanwhile, major conglomerates demonstrate their readiness for continued economic uncertainty by increasing their cash and cash-equivalent assets by approximately 30 trillion won from the end of last year to June this year.

During this period, the combined cash and cash-equivalent assets of the top 50 companies rose from 209.71 trillion won to 239.68 trillion won, up 15 percent. This trend is attributed mainly to Samsung Electronics, which expanded its cash and cash-equivalent assets from 49.68 trillion won to 79.91 trillion won, exerting a significant influence.

The increase in cash holdings is also anticipated to revive the market for corporate governance transactions that had previously been stagnant, driven by acquisitions and mergers (M&A) among large corporations following an economic recovery.

According to Maeil Business Newspaper’s “Ray the M League Table,” the number of M&A deals valued at 5 billion won or more in the first half of this year amounted to only 106, which is 63 percent of the year-ago period.