The Refining Industry Squeezes Dry... Even Eliminated Daycare Centers

GS Caltex Faces Internal Turmoil Over Closure of Daycare Centers
Industry Says "Performance Bonuses May Be Hard to Expect"

The refining industry, which recorded massive losses in the third quarter, is cutting employee welfare benefits to reduce costs. There are also forecasts that it will be difficult to expect performance bonuses early next year.

According to the industry on the 21st, GS Caltex recently closed the workplace daycare center located near its headquarters in Yeoksam-dong, Seoul. This daycare center has been rebranded as the workplace daycare center of its affiliate GS Retail, primarily accepting children of employees from related companies, and has set an operating policy allowing only children of some GS Caltex employees to use it together.

Huh Dong-soo, Chairman of GS Caltex (center), is reading a storybook to children at Ji Yesul Daycare Center, which opened on the 27th.

A company official said, "As the management environment and performance worsened, the existing workplace daycare center was closed and converted to operate as another affiliate's daycare center as part of cost reduction." The GS Caltex daycare center opened in 2012 to alleviate employees' childcare burdens, and the then-chairman Heo Dong-soo personally attended the opening ceremony, showing how much effort was put into the facility.

Inside the company, there are voices criticizing the decision as somewhat out of touch with the current workplace culture that values work-life balance (WLB). However, the realistic reason that it became difficult to maintain it due to poor performance could not be prevented. The company recorded an operating loss of 352.9 billion won on a consolidated basis in the third quarter this year due to the economic downturn in the US and China and the delay in easing production cuts by OPEC+ (Organization of the Petroleum Exporting Countries + non-OPEC oil-producing countries). The loss in the refining sector alone reached 500.2 billion won.

The situation is not much different for other companies. The combined operating losses of SK Innovation, S-Oil, HD Hyundai Oilbank, and GS Caltex in the third quarter totaled 1.4592 trillion won.

Given this situation, it is also expected that performance bonuses, which once reached 1000% of the base salary, will be difficult to expect this time. An industry insider said, "The situation in the fourth quarter is gradually improving, but a sharp rebound seems difficult," adding, "There is a widespread atmosphere that, in the worst case, there may be no performance bonuses."