Government retreats from cost-cutting focus in 109-institution reform plan

  • Government announced restructuring plans for 109 public institutions.
  • 109 institutions represent 20% of all public institutions and employ approximately 120,000 workers.
  • Over 80% of the targeted institutions require legal revisions, officials said.

The government has softened its emphasis on cost savings in a plan to restructure 109 public institutions, representing 20% of the total, one day after announcing the largest-scale reform in history. Officials said the priority is integrating overlapping and dispersed functions to respond to the AI (artificial intelligence) revolution and energy crises, rather than reducing institutions solely to cut expenses. The government has guaranteed 100% employment succession for approximately 120,000 regular and non-regular workers, meaning reform-related costs could rise. Public institution debt increased 41.9% over five years to 769 trillion Korean won last year. Officials said overlapping employees would be reassigned without reducing new hiring, and that any relocation after integration would be decided separately. More than 80% of the targeted institutions require legal revisions, making the National Assembly important to implementation.

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