Cruel Spring, Fashion Company Employees 'Shedding Clothes'... "Save Us, National Petition"

Over 10,000 Support Petition to Save Textile Industry from Apparel Vendors
Layoff Storm Hits Uniqlo, Shinsung Tongsang, Shinwon, Hyungji Elite, and Others

[Asia Economy Reporter Lee Seon-ae] The fashion industry, which has seen domestic sales and export routes blocked due to the COVID-19 pandemic, is now facing a wave of restructuring. As workforce restructuring in the fashion industry intensifies, a post titled "Save the Korean garment vendor textile industry" has appeared on the Cheongwadae (Blue House) National Petition Board, causing shock.

According to the Blue House National Petition Board on the 11th, a post titled "Save the Korean garment vendor textile industry due to the spread of COVID-19" has garnered 10,991 supporters. The petitioner stated, "Vendor companies exporting garments to the Americas are facing unilateral purchase cancellations, shipment cancellations, and payment refusals from buyers due to the spread of COVID-19 in the United States, and restructuring has begun," adding, "Our company is pressuring employees with personnel reductions, salary cuts, indefinite unpaid leave, and parental leave."

He continued, "Although the government is rolling out job stability measures related to employment retention subsidies, most people working in the garment vendor textile industry do not feel the effects of these policies at all," and lamented, "If restructuring is not done immediately, we cannot survive for a few months, and they are forcing the above four packages, but without a labor union, powerless individuals cannot withstand this situation."

The petitioner appealed, "Garment vendor companies have achieved good results, accounting for a significant portion of Korea's exports, and many workers have been sweating day and night," and urged, "Please help the garment vendor industry workers who are facing the risk of unemployment not to collapse."

The restructuring movement in the fashion industry is spreading, making a real economic impact inevitable. Shinsung Tongsang recently notified about 50 export headquarters employees of their dismissal. The layoffs occurred as overseas export operations were completely halted. An employee of Shinsung Tongsang who avoided dismissal said, "Some colleagues received dismissal notices while on overseas business trips," and added, "We are living in tension, not knowing if we will be the next to be laid off."

Shinwon also disbanded Overseas Business Division Team 1 and laid off seven employees. When closing the offline business of the young casual brand Viki, about 20 employees in charge were also let go. Hyungji Elite reduced five of its approximately 40 full-time headquarters employees at the end of last month.

Fast Retailing Korea, the Korean subsidiary of Uniqlo, foreshadowed layoffs when CEO Bae Woo-jin accidentally sent an email about the workforce reduction plan to all employees. In an email sent by CEO Bae to the head of HR on the 2nd, it stated, "Division head, 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 issues."

It further stated, "Regarding the chairman's question about why the number of regular headquarters employees increased by 42 as of February this year, I explained that it was due to many returns and reinstatements from rotation, and that the headquarters staff number could decrease again with further transfers. I am inquiring whether this response was appropriate, division head," confirming the strong intention of Fast Retailing Korea's management regarding layoffs.

Among employees, rumors are circulating that some managerial-level staff have sensed the restructuring atmosphere and are taking early steps to resign. In fact, on Blind, there are as many as three M-grade employees scheduled to leave in April. Fast Retailing Korea's ranks are generally divided into five grades (J, S, M, E, K), with M-grade including sales division heads and flagship store managers. The base salary for M-grade is over 80 million KRW, corresponding to senior management level.

A Fast Retailing Korea official cautiously stated, "Given the difficult situation, we are discussing improvement measures to structurally enhance efficiency, but it is difficult to comment on layoffs at this time," yet the internal view is that workforce restructuring will ultimately take place.

A fashion industry insider explained, "Due to the impact of COVID-19, American and European companies are unilaterally canceling ordered quantities," adding, "Many overseas companies cancel orders with just one email, so export operations have virtually disappeared, making it difficult to survive without restructuring."