KoreaTV.Radio - By Reporter Joon Lee | CEO Kevin Kim of Bank of Hope has announced a sharp restructuring plan, passing the burden of poor performance onto the employees.
CEO Kevin Kim held a press conference at the Bank of Hope's Wilshire main branch in LA on the 23rd, where he unveiled his plans for organizational reform. While Kim stated, "The core is to reorganize regional sales organizations based on business units and products to provide better services to customers and operate more efficiently," some have criticized it as a belated response to the economic downturn.
According to the restructuring plan unveiled by Kevin Kim, the CEO of the largest Korean-American bank in the United States, one out of every eight bank employees will have to leave. The plan aims to reduce 13% of the workforce and cut annual personnel expenses by $40 million. As of September 30th, 190 out of the total 1,460 employees will be affected by this reduction, meaning approximately one out of every eight employees will have to depart. Bank employees, who have endured the surge in workload even during the COVID-19 period, express discontent with the lack of consideration from the bank's management.
While the bank intends to simplify the organizational structure, unify its business lines, and proactively respond to the economic downturn, it has faced criticism for not properly managing risk during the COVID period.
As a result, the bank will be reorganized into four groups: Commercial Banking, Retail Banking, Corporate Banking, and Fee-based Business Banking. This marks a significant change from the previous structure where the bank's management, including the CEO and COO, led the bank regionally, such as in the East and West.
The roles of the bank's executives will also change. For instance, Kim Kyu-sung, the senior executive in charge of the Eastern region, will now lead the Commercial Banking sector. The most critical Retail Banking sector, currently overseen by Daniel Kim (Chief Strategy Officer), will soon have a new external appointee as its leader.
Bank of Hope previously expanded its regional operations into five divisions in 2019, which resulted in overlapping departments performing the same tasks in each division. The bank's explanation is that they are correcting the issue discovered four years ago, but some wonder if this is truly a reasonable response.
A Bank of Hope representative stated, "While there have been financial disruptions at the beginning of this year and the rapid rise in federal interest rates, shifting the blame to employees for what Bank CEO Kevin Kim, who holds more than $10 million in bank stock alone, was unprepared for is irresponsible."
A senior executive at Bank of Hope said, "We advised for an organizational reform for synergy effects following the bank's merger and acquisition at its inception, and we suggested prioritizing competent personnel recruitment rather than rushing to hire. But these recommendations were disregarded." He further stated, "Since the CEO of the bank comes from the non-banking sector, the management style seems to be more focused on numbers than the bank's core competence, which lies in its experienced bank staff."
On the day of the announcement, Bank of Hope's stock price dropped by 4.12% compared to the previous day, reaching $8.37 per share.
