The Yonhap headline is a bit misleading - “S. Korea eyes slashing troop level by one fourth: defense chief” - since this is long-term plan:

South Korea is considering downsizing its 680,000-member military by one fourth by 2020 and streamlining its combat organizations in an effort to carry out comprehensive reform of its armed forces, Defense Minister Yoon Kwang-ung said Wednesday. “Since the objective of current military reform is to transform the organization of South Korea’s military to a quality-based structure from a quantity-based one to create small but strong, advanced and elite forces, the reorganization of military structure is a key task,” Yoon said… South Korea has a plan to set its troop strength at around 500,000 in three stages by 2020, Yoon said, adding the cut will be offset by the introduction of sophisticated weapons. [emphasis added]

This will fall in line with U.S. force structure changes:

“The United States is intending to completely scrap the concept of a division. It is leaning towards the concepts of a brigade, UEX and UEY,” Yoon said. Under its broader military transformation plan, the U.S. army is creating three new echelons — the unit of action (UA), unit of employment X (UEX) and unit of employment Y (UEY) — to replace the current four — brigade, division, corps and army. The UEX is a unit sized between a corps and a division.

And of course another important aspect was not overlooked:

On the question of transforming the country’s conscription system into a volunteer military, Yoon said, “I believe the change will be difficult until 2008″ when more troop resources, such as women, will join the military. “Also, 10 trillion won will be additionally needed if we hire 500,000 officers and non-commissioned officers and set their annual salary at 20 million won,” Yoon said.

I am not sure who they will hire for 20 million won (about US$20,000) per year, which is just over the official South Korean poverty limit for a family of four, but it would at least make conscripts feel a little less used.

Overall it is probably a good thing that South Korea is reducing troops and increasing use of technology in its military. The North is not likely to invade, and however paranoid the South Koreans may be, I doubt Japan will either. However, if North Korea falls and tries to claim the ancient kingdom of Koguryo as its own, South Korea’s military wouldn’t stand a chance even if it doubled its size.