[Exclusive] Uniqlo 'Panic'... Actor Jin Bae's Mistaken Email Proposing Layoffs

CEO Bae accidentally set email to all recipients instead of HR head
"Please proceed with personnel restructuring as reported and according to plan"
Uniclo thrown into confusion... Some managerial staff already preparing to resign

[Image source=Yonhap News]

[Asia Economy Reporters Lee Seon-ae and Cha Min-young] As F&RL Korea, Uniqlo's Korean subsidiary, is pushing forward with restructuring, the plan for workforce reduction was disclosed to all employees, sparking controversy.

According to F&RL Korea on the 6th, CEO Bae Woo-jin sent an email to the head of HR on the 2nd, which was replied to all employees, revealing the restructuring plan. The email stated, "Head of department, I reported to the chairman at the board meeting yesterday, and there is great interest in personnel restructuring," and "Please ensure that the personnel restructuring proceeds as planned without any issues."

It continued, "Regarding the chairman's question on why the number of regular employees at headquarters increased by 42 as of February this year, I explained that it was due to many returns and reinstatements from personnel rotation, and that if they move again, the number at headquarters could decrease. I would like to ask if this response was appropriate, head of department," confirming the strong intention of F&RL Korea's management to reduce staff.

After the email containing details about the restructuring plan and the rotation of headquarters staff to stores was accidentally made public to all employees, internal staff at F&RL Korea were thrown into confusion. Suspicions arose that it might have been intentional rather than a mistake. This was clearly confirmed on the anonymous workplace community app Blind.

On Uniqlo's internal bulletin board, employee A said, "It is even more shocking because the email was sent by someone who came to the company shouting about making employees happy," and added, "I expected this since the boycott started, but receiving the email makes me feel helpless." Employee B also said, "I don't know if it was intentional or a mistake, but sales are obvious, and the easiest thing to cut immediately is labor costs," and lamented, "The top will tighten control, middle management will protect their own positions, and the lower ranks will have to manage on their own." Employee C sighed, saying, "Our company will never offer voluntary retirement, and if 10 people are assigned, 3 to 4 will have to leave, so it will be organized in that way."

Among employees, rumors are circulating that some managerial-level staff have sensed the restructuring atmosphere and are already taking steps to resign early. In fact, on Blind, there are as many as three M-grade employees scheduled to leave in April. F&RL Korea typically has five ranks (J, S, M, E, K), and M-grade includes sales division heads and flagship store managers. The base salary for M-grade is over 80 million KRW, corresponding to senior management.

An employee who requested anonymity said, "Usually, sales are much lower in the second half of the year, so a large deficit is expected, and therefore restructuring may be necessary, which employees understand," but criticized, "However, the person who contributed the most to causing the boycott and who loudly proclaimed employee happiness (CEO Bae) planning restructuring very quickly behind the scenes and causing irreparable harm to employees through unreasonable and ignorant actions can no longer be tolerated."

There are also strong calls for CEO Bae, the source of the controversy, to show responsible leadership. CEO Bae, who came from Lotte Department Store, was appointed as the new CEO from the Lotte side of F&RL Korea in the 2019 regular executive personnel reshuffle. F&RL Korea was established in 2004 with 51% stake by Japan's Fast Retailing Group and 49% by Lotte Shopping. Currently, Bae shares the CEO position with Satoshi Hatase from Fast Retailing. Since July last year, Bae has faced criticism over his qualifications as CEO amid Uniqlo being hit hard by the boycott of Japanese products.

This led to poor performance. Last year's sales were 974.9 billion KRW, falling below 1 trillion KRW. It was the first time since 2014 (1.0356 trillion KRW) that F&RL Korea's sales dropped below 1 trillion KRW. It decreased by 31.3% compared to 2018 (1.4188 trillion KRW). Net profit turned from 238.3 billion KRW to a loss of 1.9 billion KRW. Sales for the six-month period from last September to this February, the fiscal year-end, are estimated at about 413 billion KRW, which is 40% of the same period last year.

Another employee who requested anonymity said, "Even internal employees are outraged at the company's decision-makers who fail to empathize with Korea's reaction and consistently respond with silence and falsehoods," and raised their voice, "As a fellow Korean, I feel great shame working for such a company, and few employees believe the company can recover quickly. We only hope those responsible will take proper accountability."

In response, an F&RL Korea official cautiously stated, "After the email was sent, employees may have been confused, so we are taking time to clear up misunderstandings, but communication is still somewhat lacking," and added, "Given the difficult situation, we are discussing improvements to structurally enhance efficiency, but it is difficult to comment on the workforce reduction at this time."