Korea Electric Power Corporation (KEPCO) and Korea Gas Corporation (KOGAS) have officially announced self-help measures, including the full return of this year's wage increases for senior executives at grade 2 or 3 and above, as well as the full or more than 50% return of performance bonuses.
KEPCO has prepared self-help measures worth 25 trillion KRW to strengthen its financial structure. It plans to sell the Namseoul Headquarters located in Yeouido, a key asset in the Seoul metropolitan area, and consolidate some of the 234 regional business offices to improve workforce efficiency. Additionally, KEPCO will require employees at grade 3 and above, and employees at grade 2 and above in power group companies, to return all wage increases, and performance bonuses decided next month will also be returned fully or by more than 50%, depending on the grade.
On the 12th, KEPCO held an "Emergency Management and Management Innovation Commitment Rally" at its headquarters in Naju, Jeollanam-do, where it announced this financial stabilization plan. The goal is to carry out financial structure improvement efforts totaling 25 trillion KRW by 2026. This amount is 5.6 trillion KRW more than the comprehensive financial stabilization plan for the power group (20.1 trillion KRW) established last year when the emergency management system was initiated.
The newly added improvement plan includes selling the Namseoul Headquarters in Yeouido, Seoul, valued at about 800 billion KRW. KEPCO explained that it will maximize the sale value by linking with local government district unit plans or through "proposal contests." It will also promote leasing of three floors of the KEPCO Art Center and 10 office buildings located in a prime transportation hub in Gangnam. Furthermore, KEPCO plans to integrate and operate the 15 regional headquarters and 234 branch offices, which have been maintained based on administrative district standards since the 1980s, focusing on major hub cities.
Employees will also return their wage increases. KEPCO requires employees at grade 2 and above to return all wage increases, and employees at grade 3 to return 50% of their wage increases. Performance bonuses will also be returned fully for grade 1 and above, and 50% for grade 2, based on next month's management evaluation results. However, employees who are union members are excluded from returning wage increases as it requires agreement with the union.
Efforts to improve organizational and workforce efficiency will also be pursued. According to the 10th Basic Plan for Electricity Supply and Demand, KEPCO plans to absorb about 1,600 essential additional personnel through internal workforce reallocation. To this end, it will implement digitalization of tasks, reorganization of business offices, and task regionalization. Through digitalization of work methods such as customer service desks and unmanned 154kV substations, and automation of equipment management using robots and drones, about 210 existing employees will be reassigned to future growth areas such as new nuclear power plants. KEPCO plans to establish a dedicated support department to gradually promote organizational restructuring and workforce efficiency by 2026.
KEPCO will also delay power facility construction within the scope that does not affect stable power supply. It plans to reduce 1.3 trillion KRW by adjusting construction timing and scale, and cut a total of 2.5 trillion KRW including 1.2 trillion KRW from routine operating expenses such as business promotion costs. Additionally, through flexible operation of the coal power generation cap system, it aims to reduce purchase power costs, which account for 90% of operating expenses, by up to 2.8 trillion KRW.
KOGAS Declares Emergency Management System... 15.4 Trillion KRW Savings
Korea Gas Corporation officially declared an emergency management system on the same day and decided to focus all efforts on restoring normal management. As part of financial structure improvement, it decided that employees at grade 2 and above, including those at its subsidiary Gas Technology Corporation, will return all wage increases for this year.
Choi Yeon-hye, President of KOGAS, held an emergency resolution rally with all employees and announced a "high-intensity self-help plan" containing these measures. The scale of management innovation increased by 1.4 trillion KRW from the previous 14 trillion KRW to 15.4 trillion KRW. The plan includes stable and economical supply of natural gas, minimizing gas rate increase factors through wage freezes and organizational innovation, and strengthening public services such as support for vulnerable groups.
Regarding performance bonuses, KOGAS plans to return all bonuses for grade 1 and above and 50% for grade 2 employees together with KEPCO next month after management evaluation results are finalized. It also plans to encourage participation from all employees. A KOGAS official said, "We have officially requested participation from union members for this."
In terms of reducing operating costs, KOGAS plans to cut the operating expenses of its professional basketball team by 20% compared to last year. Additionally, it expressed its intention to design support measures for energy-vulnerable groups and promote energy efficiency innovation. Previously, last month, KOGAS unmanned 16 management offices and reassigned about 80 employees, saving approximately 5 billion KRW.
President Choi Yeon-hye said, "We deeply apologize to the public for the burden related to gas rates," and added, "KOGAS will carry out high-intensity self-help efforts with a strong sense of responsibility and strive to become a public enterprise that meets the demands and expectations of the people."
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