Number of layoffs by SMEs spikes in South Korea

The 22.1 percentage-point increase, though high, is still lower than the 50.4 percentage-point rise recorded from January (12.9%) to March (63.3%) this year, according to the Korea Small Business Institute and Statistics Korea. 

Out of the 712,000 employees of small businesses who were on temporary leave as of September, 50.1% or 357,000 had left due to the business downturn or company shutdown, said The Korea Herald. 

The national statistics agency defines small and medium sized companies as those which employ less than 300 workers.  

On one end of the spectrum, smaller businesses with less than four employees had more staff on temporary leave – 58.3% or 154,000. On the other end, companies with fewer than 300 workers, the corresponding percentage was lower at 45.1% or 202,000. 

READ: South Korea: Employment in September slides to lowest level in four months

At companies which employed more than 300 workers, the percentage was lower still at 10.5% – 8,000 or of the 76,000 on temporary leave have been laid off. 

The situation is in stark contrast compared to last year’s when 14.1% or 43,000 employees at small and medium sized companies took temporary leave in the corresponding period in September.  

The increase in the number of layoffs has been attributed to the pandemic as businesses in accommodation, F&B and sales were badly hit by lockdowns and social distancing rules.