South Korean media reported that Samsung Heavy Industries (SHI), one of South Korea’s three major shipbuilding conglomerates, is witnessing a trend of shortening average tenure among regular employees and a continuous increase in pension expenditures over the past five years. Against this backdrop, the company has shown signs of workforce restructuring, with an increase in both full-time and outsourced employees throughout the year, followed by a sharp decrease at the end of the year. South Korean industry analysts suggest this move is leading to the contradictory result of “reduced sales costs” and “decreased labor quality.”
Data shows that from 2021 to 2024, Samsung Heavy Industries’ actual pension payments were 35.3 billion won (approximately US$0.24 billion), 54.5 billion won (approximately US$0.37 billion), 50.2 billion won (approximately US$0.34 billion), and 60.5 billion won (approximately US$0.41 billion), respectively. The South Korean industry interprets this as an increase in Samsung Heavy Industries’ pension expenditures for long-term employees. However, in 2023 and 2024, the number of Samsung Heavy Industries’ full-time employees decreased by 136 and 188 respectively, continuing a downward trend.
As long-tenured regular employees leave, the average tenure at Samsung Heavy Industries continues to decline: from 19.6 years in 2022 to 18.2 years in 2023, further dropping to 17.7 years in 2024, and reaching 17.5 years by the end of the third quarter of 2025. This shift stems from a dramatic transformation in the workforce structure during 2023—temporary employees surged to 1,017, while external labor personnel soared to 3,554.
From the beginning of 2024 to the end of the third quarter, Samsung Heavy Industries saw an increase of 66 regular employees, but this was followed by a decrease of 118 employees in the fourth quarter alone, indicating significantly heightened volatility. Temporary employees increased by 383 before the end of the third quarter and added another 141 in the fourth quarter. External labor personnel increased by 340 before the end of the third quarter but plummeted by 770 in the fourth quarter.
Unlike actual pension payments, the cost of accrued retirement benefits—which represent compensation for employees’ full-year work—remains below 2021 levels at Samsung Heavy Industries. The net defined benefit liability labor cost included in cost of sales and selling, general and administrative expenses was was 50.1 billion won in 2021, decreased to 46.4 billion won in 2022, reached 39.9 billion won in 2023, and rebounded to 47.1 billion won in 2024.
By the end of the third quarter of 2025, Samsung Heavy Industries’ regular employees increased by 110, yet decreased by 8 compared to the same period last year, indicating a potential recurrence of the sharp decline seen at the end of last year. Temporary employees rose by a cumulative total of 394, marking an increase of 535 over the same period last year and maintaining steady growth. External labor personnel decreased by a cumulative total of 432, though this represents an increase of 338 compared to the same period last year.
Industry insiders in South Korea speculate: “Considering the requirement to directly hire employees after two years of long-term dispatch, it’s not hard to deduce the reason behind Samsung Heavy Industries’ pattern of increasing then decreasing personnel within the year, followed by a sharp drop at year-end—the company may be circumventing direct hiring obligations by not renewing contracts upon expiration or reassigning personnel at year-end.”
A South Korean industry insider further pointed out: “The decrease in regular employees and the shortening of their average tenure mean that skilled core personnel are being lost, which has a negative impact on the inheritance of shipbuilding technology and the accumulation of process experience. The increase in the proportion of non-regular employees and external laborers (subcontractors, foreign workers, etc.) implies potential risks to production efficiency and safety, namely, a decline in ‘labor quality’.”