Employees of Lotte Group’s distribution affiliates, the 5th largest in the business world, receive a greeting message saying that they have frequently left their jobs. This is because labor cuts such as hopeful retirement have been underway for each affiliate since last year due to the pressure of restructuring and poor performance following the restructuring of the distribution industry.
Lotte said that instead of performing large-scale manpower restructuring at the group level, there are places where it is conducted at the level of guidance on retirement programs for executive-level employees that were implemented every year. However, as most distribution subsidiaries proceed with their hopeful retirement at the same time, the intensity of staff reduction felt by employees is different from the management side, and the atmosphere is upset.
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According to the industry on the 24th, among the affiliates of the Lotte Group, Lotte Mart, Lotte Food, Lotte Asahi Liquor, Lotte GRS, Lotte Hi-Mart, and Lotte Hotel have implemented hopeful retirement. For the first time since its inception, Lotte Mart receives applications for desired retirement from employees over 10 years in all positions. As a retirement benefit, the maximum basic salary for each year of service is 27 months. Lotte Mart is suffering from sluggishness, with its cumulative operating deficit amounting to 66 billion won over the past three years due to online shopping demand. Due to the restructuring of inefficient stores last year, 12 stores were closed, and unpaid leave was given to those who wished to go from July to December. A Lotte Mart official said, “It is an inevitable decision due to deterioration in performance,” and “the desired retirement will be 100% voluntary by the applicant.” Lotte Shopping, which has department stores including Lotte Mart, supermarkets, and Robs, saw the largest drop in manpower last year due to inefficient store restructuring, and is still ongoing. In accordance with last year’s restructuring plan, Lotte Shopping closed 115 insolvent stores including department stores, marts, supermarkets, and Robs. It was said that there would be no restructuring of manpower due to the reorganization of insolvent stores, but as of the third quarter of last year, the number of workers decreased by about 3,000 compared to the same period last year. Most of them are known as marts and supermarkets where closes are concentrated. An official at Lotte Shopping explained, “Mart reduces the number of stores and changes the location of work to store employees, and some retire without accepting this.”
Lotte Food is currently accepting applications for retirement from employees for over 15 years, and Lotte Asahi Liquor is accepting applications for retirement from all employees this month following last May. Lotte GRS also sent announcements of hopeful retirement to employees over 15 years old. All of them are affiliates whose performance deteriorated due to Corona 19.
An official at Lotte Food explained, “Lotte Food is not aimed at reducing the number of people, but rather to recruit new personnel to meet the changes in the market, such as expanding the online market after Corona 19.” Lotte Asahi Liquor, which had been hit by the boycott since before Corona 19, has undergone hopeful retirement and telegram transfers to affiliates several times in the last two years, reducing manpower and leading to domestic withdrawal. Lotte GRS also explained that it was an annual guide to retirement, but it is difficult to interpret this irrespective of the situation in which earnings deteriorated, which resulted in operating losses of 11.3 billion won until the third quarter of last year.
Lotte Hotel and Lotte Hi-Mart conducted honorary and hopeful retirement last year. Lotte Hotel implemented honorary retirement for employees aged 58 and over who entered the wage peak system in 16 years. Lotte Hi-Mart also held two hopeful retirements in March and December last year. It has been 20 years since it was founded.
The union, feeling the crisis, began to act as a group. The Lotte Mart Branch, Lotte Duty Free Shops Union, Lotte Department Store Branch, and Lotte Hi-Mart Branch under the National Federation of Service Industry Trade Unions of the National Federation of Trade Unions recently launched the’Lotte Group Democratic Union Council’. They held a press conference in front of Lotte Department Store in Jung-gu, Seoul on the 19th, and reported the damage cases of each company, saying that the company is unilaterally pressing on employees through hopeful retirement, distant dispatch, sales pressure, and reduction of various welfare systems. It is pointed out that there is no countermeasure by the management for Lotte Duty Free employees who are withdrawing from the Incheon Airport Terminal 1 business at the end of this month. The council said, “We will jointly respond to Lotte Group’s restructuring centered on manpower reduction and cost reduction.”
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