[Asia Economy Reporters Lim Hye-seon, Cha Min-young] Lotte Group has abruptly replaced the CEO of FAL Korea, the Korean subsidiary of the Japanese manufacturing and specialty retailer of private label apparel (SPA) brand Uniqlo. Bae Woo-jin, the CEO at the center of the controversy over the 'personnel restructuring email,' has ultimately stepped down from the position.
According to Lotte Group on the 1st, Jung Hyun-seok, Executive Director of Lotte Shopping (Store Manager of Lotte Mall Dongbusan Branch), was appointed as the new CEO of FAL Korea by the company's board of directors. Bae Woo-jin, former CEO of FAL Korea (Executive Director), has been reassigned as the Team Leader of Project A in the Planning and Strategy Headquarters of Shopping HQ. FAL Korea is a joint venture with Lotte Shopping and Japan’s Fast Retailing each holding 49% and 51% stakes, respectively. The CEO position is jointly held by one representative from Korea (Lotte Shopping) and one from Japan (Fast Retailing). In the 2020 regular personnel reshuffle, the Japanese representative changed from Wakabayashi Takahiro to Hatase Satoshi. Bae, who was appointed CEO in December 2018, was reappointed despite performance declines caused by the boycott of Japanese products. This was based on the judgment that Bae, who was well acquainted with the internal organization, could find a solution. However, the controversy caused by Bae sending an email about personnel restructuring to all employees in April is understood to have been a decisive factor in the CEO replacement. Even within the company, the replacement of the CEO before the end of the term is seen as a disciplinary personnel action.
On April 2nd, former CEO Bae sent an email regarding the personnel restructuring plan to the head of the HR department. In the email, Bae wrote, "Yesterday, I reported to the chairman at the board meeting, and there is a lot of interest in personnel restructuring," and added, "Please proceed to ensure there are no issues with the personnel restructuring as reported." The email was mistakenly sent by Bae to all employees, which led to public controversy. In response, the group explained, "It was a personal mistake during discussions to improve the efficiency of structural reform," and clarified, "It is unrelated to personnel restructuring." However, employees were greatly unsettled, especially since this came after Lotte Shopping announced a large-scale store restructuring to downsize. The newly appointed CEO, Jung Hyun-seok, born in 1975, is known within Lotte Shopping as a leader with strong leadership and drive. It is expected that CEO Jung will focus primarily on stabilizing the internal organization.
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