A handout photo made available by the Royal Thai Navy shows the Thai-flagged cargo ship Mayuree Naree on fire after being hit by Iranian missiles in the Strait of Hormuz, Iran, March 11. EPA-Yonhap
The Middle East crisis and prolonged U.S. interest rate hikes are squeezing Korea's construction sector, triggering massive job cuts at major companies and a surge in bankruptcies among smaller contractors.
Cost pressures have deepened due to the conflict in the Middle East, which has caused severe supply disruptions of naphtha, a key petrochemical feedstock, heightening the financial strain on builders.
The broader economic downturn is driving the industry to downsize rapidly. The top 10 domestic construction firms employed 49,370 workers at the end of last year. That number fell by 2,863 employees, or 5.5 percent, compared to the 52,233 workers employed at the end of 2024, according to data released by Korea's Financial Supervisory Service last Thursday.
The image generated by artificial intelligence shows layoff trends among Korea's top 10 construction firms.
Nine of the top 10 firms reduced their headcounts. SK Ecoplant was the sole exception, adding 259 employees. DL E&C recorded the largest reduction as 847 employees left the company last year. Hyundai Engineering cut 635 employees, and GS E&C reduced its staff by 487.
Firms are actively scaling back their workforces this year. Lotte E&C is currently rolling out buyouts targeting tenured employees and those nearing retirement age. The company is offering severance packages worth up to 30 months of base pay, along with a special bonus of 30 million won ($20,216).
Hyundai Engineering launched a similar program last year. The company offered support funds, tuition assistance and job transition consulting to employees aged 45 to 59 with at least five years of tenure. POSCO E&C also slashed its management positions by 20 percent.
Cranes tower over an apartment construction site in Seoul. Newsis
The outlook remains bleak. The Construction Business Survey Index compiled by the Construction and Economy Research Institute of Korea stood at 67.8 last month. The figure represents an increase of 5.3 from the previous month but remains far below the baseline of 100.
Source: Korea Times News
