HHI Lays Off Nearly One Third of Executive Management

President and CEO Kwon Oh-gap was appointed a month ago to engineer a turnaround at the company. 

World's largest shipbuilder Hyundai Heavy Industries (HHI) has laid off 81, or nearly a third, of its 262 executives, local Korean media reports. 

The layoffs took place across the South Korean-based company and its affiliates, Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries (HSHI). 

Early this week, current President and CEO Kwon Oh-gap demanded resignations from all of HHI's executives above managing director level after the company reported disappointing second quarter earnings.

HHI reported a loss of KRW 616.6 billion ($593.6 million) in the second quarter, in addition to reporting a record operating loss of KRW 1.11 trillion ($1 billion).

"We made the decision to bring a change to overcome current difficulties," HHI said.

"It is urgent to recover our competitiveness through the renewed organisation."

Kwon, who was formerly CEO of Hyundai Oilbank Co.,was appointed a month ago to engineer a turnaround at the company. 

"Executives necessary for new organization will be reappointed, and capable general managers will be promoted early," Kwon said earlier this week. 

"I will transform this organization to be young and energetic."

The management shakeup includes the promotion of Chung Ki-sun, the oldest son of the company's largest shareholder, to the role of vice-president. 

Ha Gyung-jin, who served as CEO and senior executive vice-president at HSHI, will be the company's new president and CEO. 

Former CEO and senior executive vice-president of Hyundai Oilbank Moon Jong-bak will also join him as President and CEO. 

Just last year, HHI announced that it would be raising its prices as the demand for fuel-efficient vessels boosted its sales.