In the face of South Korean lay-offs Chinese corporations are poaching skilled IT workers from Korea, promising promotions and better pay. The exodus could hurt Korea's long term aspirations for increasing the country's profile as a top IT center.

Last year, several Korean IT companies, including NCSoft, NEOWIZ GAMES and SK Communications, cut large numbers of mid-level positions, to pull the belt in as Korea felt the credit crunch which, until last year, had made minimal impact due to the very strong market positions of major conglomerates like Samsung, Hyundai, and LG.

Gaming companies were the first to move, with NC Soft cutting 15% of their workforce (400 staff) across the globe last September. NEOWIZ GAMES shed 200 jobs and 250 staff at SK Communications voluntarily resigned. 200 from Yahoo Korea also lost their jobs, when the Korean office was shut down in December 2013.

As well as prevailing uncertainties in the Korea IT industry, pay levels in China are “up to 1.5 times higher than in Korean”, according to one Korean IT professional who has moved. With the current dramatic rise of Chinese IT, the future in China looks more profitable in the short term and more secure in the long term than in Korea.

This has been compounded in recent weeks with dramatic falls in the Korean currency affecting profits for Korea’s top corporations being affected.

Foreign companies such as Apple, Microsoft (MS), and Samsung are also setting up bases in China, offering even more options for top IT personnel. Microsoft integrated its Korean R&D center into Beijing-based Microsoft Research Asia (MSRA) late last year to more effectively respond to potential in China. The Beijing centre is now the second largest of six globally, after the company’s main facility in the US.

Another Korean IT expert bemoaned the Korean government’s focus on restricting the Korean game industry, rather than celebrating it. “Games have significantly contributed to the Korean IT sector’s growth, but the Korean government focuses only on regulating the game industry,” he said. “The government keeps sapping the domestic game industry by imposing regulations, hampering the game sector’s world-class competitiveness, while Chinese authorities provide full support to IT companies industry-wide.”

To read more about how the Korean government is hampering growth of the games industry, read our earlier article on the subject here.

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