Lotte Implements Voluntary Retirement Since Last Year
Strong Measure to Eliminate Deficit Positions Among Applicants
Salary Reduction Effect, Dividends to Shareholders
[Asia Economy Reporter Lim Hye-seon] "How beautiful is the back of a person who clearly knows when it is time to leave and goes."
Lee Jin-su (46, pseudonym), who works at Lotte Foods, has been repeatedly recalling poet Lee Hyeong-gi’s ‘Falling Flowers’ these days. Since last year, each affiliate has successively conducted voluntary retirement, and quite a few colleagues have already retired. Recently, the company announced voluntary retirement. In the personnel announcement on the 8th, Lee was demoted from team leader. With many expenses still to come, including children’s education fees, it was difficult to endure the company’s unspoken pressure. Although the voluntary retirement condition of ‘basic salary × 24 months’ was not favorable compared to other large corporations, knowing that ‘enduring is hell, leaving is the afterlife,’ he ultimately submitted the voluntary retirement application.
Lee said, "Although the salary level is low, I have worked with pride in a stable company under the owner’s management philosophy of ‘not cutting employees,’" and lamented, "The job market has frozen due to the aftermath of the COVID-19 crisis, so it feels bleak."
On the 18th, a harsh wind of downsizing swept through Lotte, ranked 5th in the business world. Among Lotte affiliates, Lotte Foods, Lotte GRS, Lotte Asahi Liquor, Lotte Himart, and Hotel Lotte have implemented voluntary retirement. Because the voluntary retirement conditions are not good, there are not many applicants. Some affiliates took the extreme measure of eliminating the positions held by employees. With the disappearance of position allowances, salaries also decreased. As a result, a significant number of employees whose positions were eliminated are applying for voluntary retirement. Employees raise their voices, saying, "The company is lowering salaries to push us toward voluntary retirement."
An employee of a Lotte affiliate said, "When Lotte abolished the seniority system in the past, it provided allowances for positions to match salary levels with the same industry," adding, "At Lotte, even if you are promoted to assistant manager, manager, or senior manager, the salary increase is minimal, but the company has significantly reduced the number of positions, effectively lowering salaries."
In the case of Lotte Chilsung Beverage, when integrating the beverage division and the liquor division, the welfare and salary system standards were aligned to the relatively lower liquor division. By cutting the base salary and converting some allowances, the annual salary was adjusted, resulting in a decrease in the actual amount received.
The morale and sense of loss among executives and employees of major affiliates are also growing. Lotte Holdings and Lotte Confectionery announced plans to increase shareholder dividends amid voluntary retirement, prompting self-deprecating criticism that "they intend to give shareholders the price of employees’ tears."
An employee of a Lotte affiliate said, "The company is trying to induce voluntary resignation behind the scenes while watching the government’s emphasis on maintaining employment due to COVID-19," and added, "In times of crisis, the company should find ways to increase employee productivity, but it only creates anxiety, leaving many Lotte employees feeling helpless."
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