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The move is part of a new strategic direction devised by the company’s new CEO, Kim Young-seop, who has been in the role since August
South Korean telco Korea Telecom (KT) has announced a major restructuring programme as part of an increased focus on AI and cloud services.
This strategic shift involves the establishment of two new subsidiaries and significant changes to the company’s workforce.
According to the newspaper Business Korea, the company will create two new subsidiaries – “tentatively” named KT OSP and KT P&M – and implement a large-scale voluntary retirement scheme for employees with over 10 years of service or those nearing retirement.
A board meeting was held this week to decide on the final details of the subsidiaries, which are set to be properly established in January next year.
KT OSP will reportedly focus on field operations and network management, with an initial capital investment of 71 billion won ($52.7 million), while KT P&M will focus on customer service, with a smaller capital base of 10 billion won ($7.4 million). Nearly 3,800 employees will be transferred to these new businesses, which are set to begin operations on January 1, 2025.The reallocation of affected employees is expected to begin as early as this month.
Alongside this restructuring, KT says that its voluntary retirement scheme will begin from next month. Exactly how many jobs are expected to be cut was not specified, but the total number of employees affected by the reallocation and voluntary retirement could reach “up to 5,700”, suggesting that around 2,000 jobs could be eliminated.
As part of its broader strategy, KT is investing heavily in AI and cloud sectors. The company has partnered with Microsoft to co-develop AI models and data center infrastructures, with a joint investment of 2.4 trillion won over the next five years. This move aligns KT with industry trends, as other telecom companies like SK Telecom are also investing in AI and offering early retirement programs.
In related news, this week KT and Samsung have been chosen by the Korean Navy to deploy a private 5G network as part of its ‘Smart Naval Port’ project. The project, which is the first of its kind at a Korean naval base, began this summer with the goal to complete deployment by the end of next year.
“The companies will build a more intelligent and fully independent network infrastructure to provide seamless coverage and enhanced connectivity for the Republic of Korea Navy 2nd Fleet,” the press release stated.
The new ICT network will have use cases including intelligent security monitoring and battleship operation management.
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