KT Corporation has outlined a restructuring plan that will lead to jobs being lost at the telco.

Business Korea reports the Korean carrier is set to carry out a major restructuring, which includes the creation of two new subsidiaries, along with the implementation of its first large-scale voluntary retirement scheme.

The publication reported that the telco was set to hold a board meeting this week to establish the subsidiaries, named KT OSP and KT P&M.

These subsidiaries are set to be officially established on January 1 next year, with KT holding 100 percent of the shares.

BK reports that the rejig is part of a broader strategy to optimize the workforce and enhance operational efficiency.

The restructuring at the company will relocate employees involved in field operations, such as line and power management for telecommunications and broadcasting facilities, plus those in customer contact centers.

In total, 3,780 employees based at KT Corp's HQ are expected to be transferred to the new entities.

KT OSP will have an initial capital of 71 billion won ($51 million) and will employ approximately 3,400 personnel, while KT P&M will start with 10 billion won ($7.2m) and around 380 employees.

However, the company's planned restructuring will also lead to layoffs at the company.

BK reports that KT plans to offer special voluntary retirement payments ranging from a minimum of 165 percent to a maximum of 208.3 percent of the standard severance pay.

The reallocation and voluntary retirement could impact up to 5,700 people, while the number of KT headquarters employees will be reduced from around 18,000 to about 12,000.

Voluntary retirements are set to begin next month.

Separately this week, KT Corp was picked alongside Samsung to build and deploy a 5G private network for the Republic of Korea Navy at a Korean Naval base.