| Pfizer Korea employees walk into the company's head office in Seoul. The company will let go many employees despite robust growth in recent years. / Korea Times file |
Job-cutting plan runs afoul of state-driven economic recovery drive
By Park Si-soo
Lee Dong-soo, Pfizer Korea CEO |
The move comes at a time when the Korean branch of the U.S. pharmaceutical giant has maintained robust growth in recent years despite an industry-wide slowdown, stirring controversy among employees.
The plan also runs afoul of President Park Geun-hye and her administration's much-touted drive to create jobs and extend the retirement age at major companies.
Pfizer Korea, which had 750 employees as of 2014, reported 628.3 billion won ($534.7 million) in sales last year, up 4.8 percent from 2013.
"Negotiations are underway between labor and management," said a member of Pfizer Korea's union. "We will cooperate with management if the restructuring is deemed necessary. But we will oppose management if it pushes it forward without justifiable reasons."
A Pfizer spokeswoman said the company formally informed the union of the restructuring plan, Thursday, but that details, including the number of employees to be let go and compensation for them, have not been decided yet.
"If things go smoothly, the plan will be implemented later this year," the spokeswoman said. "The consumer business division showed a poor performance last year. So the division will become the primary target of this. But it doesn't mean other divisions will be immune."
At issue is the timing of the job-cutting plan. President Park and her administration are going to great lengths to create jobs, which they believe will help boost domestic spending and the nation's sagging economy. Samsung, Hyundai Motor, SK and many other big companies are fully cooperative with the economic recovery drive, unveiling large-scale employment and investment plans despite business uncertainties.
Many foreign companies here are committed to backing the move to fulfill their duties as responsible members of Korean society.
A total of 12 foreign drug companies here expanded their employment between 2013 and 2014, according to data from the Pharma Industry Association that represents 36 foreign drug companies here. Merck Korea added 145 people to its payroll last year; Janssen Korea added 39; Bayer HealthCare Korea, 33; and Roche Korea, 14.
"By all accounts, Pfizer (Korea) is not in a desperate situation to cut workers," an industry insider said. "It's obvious that the layoffs are one of the essential tools companies have to ensure their survival and sustainable growth. But my question is why now."
He didn't rule out the possibility that Pfizer Korea will face a strong backlash if it pushes forward with the plan without convincing reasons.
Pfizer Korea has been criticized for lacking in social responsibility.
The company donated 1.25 billion won to charity in 2013, only 0.2 percent of its total sales. In that year, the average donation-sales ratio for foreign pharmaceutical companies here was 0.37 percent, according to the Financial Supervisory Service.