Public Agency Mergers Set to Trigger Shake-Up of Executives and Directors

The government’s plan to merge or consolidate about one-fifth of South Korea’s public institutions is expected to bring a major shake-up for agency heads and senior managers. Officials say jobs and new recruitment for roughly 120,000 employees at the affected institutions will be preserved, but internal disruption appears unavoidable.

The Finance and Economy Ministry’s plan for reforming public-institution functions, released on Jan. 4, covers 109 institutions. It guarantees employment succession for their staff but explicitly excludes executives. That provision could lead to restructuring involving hundreds of agency heads and directors.

The ministry said cutting costs was not the primary aim of the mergers. It nevertheless acknowledged that personnel costs linked to the heads of smaller institutions could fall. Many agency chiefs may also leave before completing their legally prescribed terms.

The possibility of replacing officials appointed under the Yoon Suk Yeol administration has drawn particular attention. The five power-generation companies are expected to enter the consolidation process first. Except for Korea South-East Power, whose top post is vacant, all of their heads were nominated under the previous administration. Lee Young-jo of Korea Midland Power and Lee Jung-bok of Korea Western Power took office in September 2024, while Kim Joon-dong of Korea Southern Power and Kwon Myung-ho of Korea East-West Power began their terms in November 2024. Each has more than a year remaining in office.

The details will be settled through consultations between the relevant ministries as lawmakers draft or revise the necessary legislation. One leading option would end the terms of all existing agency heads when the merged institutions are launched, followed by open recruitment for new appointments.