Pantech workers to go on pay-reduced leave to help company cut costs
SEOUL, Sept. 2 (Yonhap) -- Pantech Co., South Korea's No. 3 handset maker, said Tuesday it will put about 30 percent of its workers on leave with reduced pay in a bid to cut costs after the company came under court receivership last month from a severe cash shortage.
The leave will be for about two months, and the employees will get 70 percent of their regular pay during the period, the company said. Pantech will bear 49 percent of the pay and the government 21 percent.
"While for saving costs, the main reason for the paid leave is to allow staffs to recharge and refresh," an official from Pantech said.
Pantech filed for court receivership at the Seoul Central District Court last month, failing to normalize its operations after completing a workout program in March.
The court, which commenced its receivership program of Pantech on Aug. 19, said the process will be carried out in a "fast-track" manner by gathering opinions from Pantech's creditors as well as other investors.
Pantech had graduated from a five-year debt rescheduling program in December 2011, but its financial footing weakened again as it struggled with falling sales from increased competition in the local smartphone market dominated by Samsung Electronics Co. and LG Electronics Inc.
Pantech claims about 10 percent of the domestic handset market, which pales in comparison to Samsung's 60 percent and LG's 15 percent.
colin@yna.co.kr
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