KOREAN MARKET RESPONDS POSITIVELY TO KT CORP RESTRUCTURING PLAN.

SEOUL, Oct 1 Asia Pulse - Shares of KT Corp. (KSE:30200), South Korea's largest fixed-line telecom operator, rose 3.64 per cent, or 1,650 won, as of 11:10 a.m. Wednesday morning after the company's announcement Tuesday that it plans to implement a major restructuring program.

KT announced Tuesday evening that it would slash some 5,500 jobs, equivalent to 12.6 per cent of its entire workforce, through an early retirement program, in order to cope with stagnant sales and tough competition in the saturated market.

The cuts will see KT's workforce shrink from 43,700 employees to 38,200. Those to be affected by the plan are mainly non-management-level officials such as network repair personnel and customer service staff across a number of KT facilities.

The firm plans to provide severance packages and other payments to the early retirees amounting to an average 150 million won (US$130,050) per employee, according to a public notice to the Korea Stock Exchange.

A total of 825 billion won (US$71.5 million) has been set aside to cover the retirement costs but a senior KT official warned that the telecom giant might "need to consider raising the figure."

However, the layoffs will save some 330 billion won in annual operating costs, the statement said.

Since the Asian financial crisis in late 1997, KT has moved steadily to trim a workforce that ...