Veteran with Over 100 Million Won Salary Quits... Card Company Encourages Voluntary Retirement for 'Born in the 70s'

Restructuring Despite No Earnings Shock... Workforce Unrest
Net Profit Up 8%, Average Tenure Up 5%, Salaries Up 1%
Urgent Need for Big Tech Solutions and Loan Business Restructuring

It has been confirmed that credit card companies implemented voluntary retirement for employees with over 20 years of service last year despite increased performance. They carried out restructuring amid rising company performance, employee tenure, and salaries (annual wages). This move is said to be due to a negative outlook on the industry itself, stemming from weakened growth momentum in the card industry, rather than a temporary cost-cutting measure.

According to the industry on the 17th, among the eight full-service card companies, five (Woori, Hyundai, KB Kookmin, Shinhan, and Hana Card) have either implemented or are in the process of implementing voluntary retirement from the end of last year to early this year. These five companies have brought out the voluntary retirement card after 2 to 3 years. KB Kookmin Card last did so in December 2021, Woori, Hyundai, and Hana Cards at the end of 2022, and Shinhan Card for the first time since January 2023. Three companies (Samsung, Lotte, and BC Card) stated they have no plans for voluntary retirement. Samsung Card has not implemented voluntary retirement since 2012, BC Card since 2016, and Lotte Card since 2021.

The five companies withheld information regarding the number of employees taking voluntary retirement, the amount and payment period of severance pay, and reemployment procedures. However, it is known that Shinhan Card released 62 employees born between 1968 and 1974 in December last year. Four companies (Woori, Hyundai, KB Kookmin, and Hana) reportedly included fewer employees in their restructuring targets. All four companies said that "double-digit numbers (10 to 61 employees)" were included in the target group.

Hyundai Card and Hyundai Commercial are undergoing voluntary retirement procedures. Hyundai Card and Hyundai Commercial reportedly extended the voluntary retirement application period, initially set from the 20th of last month to the 7th of this month, until the 21st. The target employees are those with over 20 years of service, and the condition offered is severance pay equivalent to 39 months (3 years and 3 months) of salary. A Hyundai Card official said, "We cannot confirm the details, but it is true that the HR department continues to accept applications."

Woori Card implemented voluntary retirement for regular employees born in 1969-1970 who have worked for more than 10 years after joining as full-time employees, and department heads born after 1971. Special severance pay is 19 months (1 year and 7 months) for those born in 1969, and 31 months (2 years and 7 months) for those born from 1970 onwards.

What is noteworthy is that despite increased company-wide performance, card companies have brought out the voluntary retirement card for senior employees. According to the Financial Supervisory Service, the combined net profit of the eight card companies from the first to third quarters last year was 2.2523 trillion won, an 8.2% increase compared to the same period the previous year. Both tenure and salaries also increased, which is interpreted as having an influence. As of the first half of last year (June 30), the average employee tenure was 8.7 years, up 4.8% from the previous year. The average employee salary as of the end of 2023 (December 31) was 115.13 million won, an increase of 0.8% from the previous year.

However, the industry views this restructuring not simply as a cost-cutting measure. It is seen as different from typical restructuring where employees are urgently laid off due to weakened capacity to pay salaries. Even as voluntary retirement is taking place, companies like Shinhan Card and Hyundai Card have offered 'options' such as contract positions, but employee participation rates are low. This reflects a dominant view that senior employees with over 20 years of service have judged that the company lacks vision.

An industry insider said, "The card companies' vision is not bright, causing unrest among field employees. The companies are trying to reduce costs and improve their structure but have not found a sharp solution," adding, "This means both the company and employees are struggling."

Another industry insider said, "Due to regulatory fee adjustments and consumers switching to big tech (large information technology companies) simple payment methods like Apple, Samsung, Naver, Kakao, and Toss, card companies are clinging even to high-interest loan businesses," adding, "Although there has been no earnings shock, the news of voluntary retirement has shaken employees considerably."