Pepper Savings Bank Union Rejects Job Deal, Layoffs Resume

Pepper Savings Bank's labor union rejected a tentative collective bargaining agreement on September 29 by member vote, and management resumed individual layoff notifications the next morning, September 30, according to financial industry sources cited on October 1.

The agreement, drafted September 22 by the Korean Financial Industry Union's Pepper Savings Bank chapter and CEO David U. Drake, would have introduced a 4.5-day workweek—reducing statutory weekly hours from 40 to 36—and adjusted base salaries down 8.3% while maintaining hourly wages. The uniform pay adjustment would have applied to every position, from entry-level staff to senior managers.

For workers, the deal would have traded an 8.3% permanent pay cut for fewer hours on the clock and a hard ban on management-driven dismissals during the agreement's life.

What did the agreement offer in exchange?

Job security provisions formed the core trade-off. Management agreed to halt dismissal procedures upon signing and to prohibit layoffs and forced-resignation tools such as voluntary retirement programs for the agreement's duration. A wage restoration clause would have returned hourly pay to prior levels if the bank posted annual cumulative net profit of at least ₩10 billion (approximately $7.4 million) starting the following year.

Why did members reject it?

The direct cause was internal resistance to changes in work arrangements and wage structure. The union's executive board negotiated a plan to spread the burden across all employees rather than target specific staff for restructuring, but failed to win member support.

How many workers face layoffs now?

Management had previously mentioned a layoff scale of around 100 employees. The company has not confirmed the actual number of notifications issued beginning September 30. Union officials say they are tracking layoff notifications among employees and planning an on-site meeting to coordinate a response.

Management is prioritizing high-salary employees, with executives and senior managers likely first to receive notices. For those individuals, the practical implication is severance plus the loss of ₩7 trillion-tier employer credentials—the bank held total assets in that range through 2022 before aggressive bad-debt cleanup reduced assets to ₩2 trillion (approximately $1.5 billion).

Can the wage-restoration trigger realistically be met?

With first-half 2025 cumulative net losses at ₩11.4 billion (approximately $8.4 million)—an improvement of ₩20 billion from the same period a year earlier—the bank remains in the red. Cumulative net losses from 2023 to 2025 reached ₩259 billion (approximately $190.4 million). Internal voices question whether a company posting hundreds of billions of won in quarterly losses can suddenly swing to a ₩10 billion annual net profit.

What comes next?

The union says it will provide organizational-level support if notified employees file lawsuits, and collective action including strikes remains on the table. The bank's first labor union formed this year after restructuring accelerated since CEO Drake took office in May, prompting speculation in some quarters that the moves prepare for a sale.

Pepper Savings Bank has already sold its women's professional volleyball team to cut tens of billions of won in annual operating costs, a divestment expected to be reflected in second-half earnings. A company spokesperson said, "We have confirmed the vote results on the labor-management agreement," adding that "measures for business normalization will be reviewed in accordance with relevant laws and procedures."

The next concrete signal will be the size of the layoff list management finalizes and whether the union escalates to litigation or industrial action before November.