Korea's top three shipbuilders are poised to shut down 20 percent of their operations and lay off 80,000 workers after catastrophic losses due to overreaching and plunging order.

Daewoo Shipbuilding and Marine Engineering, Samsung Heavy Industries and Hyundai Heavy Industries posted W8 trillion in losses last year and will try to raise W15.9 trillion by selling off assets and laying off staff (US$1=W1,158).

Hyundai Merchant Marine and Hanjin Shipping plan to replace their CEOs and begin rehabilitation with the support of creditors as soon as talks over vessel charter fees are wrapped up.

The government will pump W12 trillion into the main creditors, Korea Development Bank and Export-Import Bank of Korea, which are heavily exposed to the ailing shipbuilders.

Finance Minister Yoo Il-ho announced the measures on Wednesday in a meeting with government officials. Yoo said the restructuring and reform of the shipbuilding industry is unavoidable to ensure the "survival" of the Korean economy.

He added that external circumstances are growing increasingly difficult for Korea, which requires comprehensive reforms.