Announcement of Corporate Value Enhancement Plan and Workforce Restructuring
Operating Profit Margin to Grow to 9% Range by 2028
KT Employee Count Expected to Decrease by 23% Compared to Current Levels
KT announced that it will innovate its business structure by integrating artificial intelligence (AI) and information technology (IT) and aims to achieve visible profitability improvements within the next four years. Having completed workforce reallocation, the company appears to be embarking on a full-scale transformation into an AI enterprise.
According to KT on the 6th, as part of its workforce restructuring, the company established two technology-specialized subsidiaries (KT Netcore and KT P&M), transferred employees to these subsidiaries, and accepted applications for special voluntary retirement. As of the application deadline on the 4th, a total of 1,723 employees applied for transfer, including 1,483 for KT Netcore and 240 for KT P&M. Approximately 2,800 employees applied for special voluntary retirement.
Assuming all applicants for transfer and voluntary retirement leave the company, KT’s workforce will decrease by 23% from its current level to about 15,000 employees.
The newly established subsidiaries will be responsible for tasks such as building and maintaining network infrastructure, including lines and power supply. Personnel committees at various levels will select suitable employees based on their job expertise and capabilities. These employees will be officially assigned when the new subsidiaries launch in January next year.
Alongside this, KT disclosed through a public announcement its mid-to-long-term goal to increase its return on equity (ROE) based on consolidated financial statements from the current 6% range to about 9-10% by 2028. ROE is a key profitability indicator showing how much profit is generated from shareholders’ equity. This clear target was set after completing workforce reallocation.
KT plans to transform its business structure into an ‘AICT Company’ by combining AI and IT technologies. The strategy is to accelerate AI transformation in business-to-business (B2B) sectors through structural innovations in telecommunications, media, networks, and IT.
KT aims to expand the AI and IT sectors, which accounted for about 6% of its standalone service revenue last year, to more than 19%?approximately three times larger?by 2028. Through profitability-focused business structure innovation, the company expects to improve its consolidated operating profit margin from the current 6% range to the 9% range by 2028.
Additionally, KT plans to promote asset liquidity by selling or developing non-core assets such as idle real estate and available-for-sale securities. The improved cash flow from these efforts will be used for new business investments and shareholder returns. In particular, to enhance shareholder value, KT plans to repurchase and cancel treasury shares worth a cumulative 1 trillion won by 2028.
Jang Min, KT’s Chief Financial Officer (CFO, Executive Vice President), emphasized, "We are reviewing various measures to increase corporate value and will actively communicate with the capital market regarding the outcomes and implementation of these measures."
Recently, KT introduced the ‘Genie TV Set-top Box 4,’ which applies on-device AI technology. It is notable for being the world’s first IPTV set-top box equipped with an 8K UHD chipset. The set-top box is equipped with various sensors that adjust the TV screen brightness and volume according to the situation and automatically turn on the TV when a user enters the living room. KT plans to introduce a high-performance AI agent specialized for Genie TV next year through a strategic partnership with Microsoft.
Kim Hoon-bae, Head of KT’s Media Platform Business Division (Executive Vice President), explained, "KT will evolve the IPTV set-top box into an ‘AI hub’ connecting customers and AI. In addition to Microsoft, we are preparing total AI solutions through collaborations with several big tech companies."
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