Amorepacific Announces Second Voluntary Retirement in Five Years
LG Household & Health Care Also Launches Voluntary Retirement Program
"Gradual Withdrawal from Offline Stores"
Major domestic cosmetics companies are accelerating their workforce restructuring. Having aggressively scaled up in the past, these companies are now undergoing intensive structural reforms as they lose ground to small and mid-sized K-beauty companies that are growing rapidly through social networking services (SNS).
According to the cosmetics industry on December 5, Amorepacific announced that it will be implementing a voluntary retirement program to proactively respond to rapidly changing business environments both domestically and internationally. This is the second time Amorepacific has accepted voluntary retirements since its founding, following the first instance in December 2020, five years ago.
The program targets employees who have worked for at least 15 years in company-wide support or offline sales organizations, as well as experienced hires aged 45 or older.
The companies included are Amorepacific Holdings, Amorepacific, Innisfree, Etude, Amos Professional, Osulloc, and Espoir.
For employees with 20 years or more of service, the severance package amounts to 42 months of base salary. Those with between 15 and 20 years of service, as well as experienced hires aged 45 or older, will receive two months of base salary for each year of service.
In addition to the severance package, statutory severance pay, unemployment benefits, and a comprehensive health check-up service for the employee and their spouse for two years after retirement will be provided.
An Amorepacific representative explained, "Through this program, Amorepacific Group aims to strengthen its overall corporate structure while providing practical support to employees seeking new career opportunities."
LG Household & Health Care is also conducting a voluntary retirement program. Previously, LG Household & Health Care announced that from November 20 to 31, it would accept voluntary retirement applications from sales promotion staff working at offline stores such as duty-free shops and department stores within its beauty division. All employees and those on leave aged 35 or older are eligible, and applicants will be notified of the review results between December 3 and 7, with final retirement set for December 21.
The severance package includes 20 months of base salary and additional support payments. For employees with school-age children, the package also covers 5 million won for middle school, 7 million won for high school, and tuition for up to four semesters for university students.
This move is in line with the ongoing reduction of offline stores. LG Household & Health Care is reportedly gradually withdrawing from offline stores as the distribution industry shifts its focus from offline to online channels.
Large cosmetics companies have been struggling recently due to the rise of H&B (health and beauty) stores such as Olive Young, Daiso, and online platforms. Amorepacific's sales last year reached 4.2599 trillion won, with an operating profit of 249.3 billion won. Compared to the boom year of 2021, these figures represent declines of over 20% and 30%, respectively. LG Household & Health Care posted consolidated sales of 1.58 trillion won and operating profit of 46.2 billion won in the third quarter of this year, down 7.8% and 56.5%, respectively, from the same period last year.
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