Lotte-initiated Workforce Restructuring Begins... Hi-Mart Implements 'Voluntary Retirement'

Lotte Hi-Mart's First 'Voluntary Retirement' in 20 Years Since Establishment

Offline Store Profitability Declines... Operating Profit Plummets 41.1% Last Year

[Asia Economy Reporter Lim Hye-seon] Electronics retailer Lotte Hi-Mart is implementing its first-ever 'voluntary retirement' program since its founding 20 years ago. This measure comes in response to worsening business conditions.

According to Lotte Hi-Mart on the 9th, the company announced on its internal bulletin board on the 4th that it will accept applications for voluntary retirement until the 16th. The target employees are those aged 50 and above, holding positions from assistant manager to department head, with over 25 years of service. It is known that about 80 employees qualify for the voluntary retirement conditions. Hi-Mart will provide voluntary retirement consolation payments and startup reemployment support funds in addition to the statutory severance pay.

Hi-Mart's operating profit last year was 109.9 billion KRW, a sharp decline of 41.1% compared to the previous year. Sales decreased by 2.1% to 4.0265 trillion KRW. This is the result of deteriorating profitability of offline stores. Hi-Mart plans to close 11 unprofitable stores and consolidate 21 stores out of approximately 460 nationwide within this year.

Starting with Hi-Mart's voluntary retirement program, Lotte Shopping affiliates are also expected to reduce their workforce sequentially. Last month, Lotte Shopping announced it would close 200 stores including department stores, marts, and supermarkets. Although Lotte Shopping stated at the time that it would not conduct forced restructuring, the industry anticipates that workforce restructuring will be inevitable.