South Korea's Ssangyong Motor Co said yesterday it will lay off 36 per cent of its workers as part of plans to normalise operations.

The plans to lay off 2,646 of its 7,100-strong workforce also included a number of measures aimed at putting the struggling company back on track.

Following the announcement, the company's shares, which have climbed since Monday in anticipation of the revival plans, jumped 14.85 percent to close at 1,740 won ($1.3). At its lowest, Ssangyong's shares had plunged to 850 won.

The company said it also plans to reduce salaries and welfare costs during the workout period.

According to the company, plans concerning pay and workforce management will bring about a cost reduction of 232 billion won, of which 136 billion won will be generated by laying off workers.

In addition to laying off workers and cutting salaries, the company said it plans to sell off real estate to generate much needed cash.

Three properties, including a factory site within an industrial complex in Pyeongtaek, are slated for sale through which the company hopes to raise between 100 billion won and 200 billion won.

The company, plagued by huge losses since last year, said such measures were unavoidable if it was to survive.

Last year, hit by rising fuel prices and the global economic crisis, the company's sales dropped 29.6 per cent from 2007. Sales have continued to drop this year with first quarter sales reduced by 76 percent from the same period last year.

According to the company's financial report for last year published Tuesday (April 7), the company recorded an operating deficit of 227 billion won and net deficit of more than 700 billion won.

Other measures announced yesterday included improving productivity and the competitiveness of its marketing strategies while launching two new passenger cars and three sport utility vehicles by 2013 to upgrade its lineup.

Although the company faces liquidation if its plans are deemed inadequate, Ssangyong Motor's revival plans are likely to be met with stiff opposition from its labour union.

Even before the final plans were announced, Ssangyong Motor's union made its stance clear. At a press conference on Tuesday, Ssangyong Motor's union leader Han Sang-kyun said that any plan to lay off workers is evidence that management does not have the will to keep the company alive.