AmorePacific Implements Voluntary Retirement Amid Financial Difficulties "Layoff Scale Undecided"

[Asia Economy Reporter Yujin Cho] Amorepacific, which has fallen into severe management difficulties due to the impact of the novel coronavirus infection (COVID-19), is reducing its workforce through voluntary retirement.

According to related industries on the 13th, Amorepacific announced through an internal notice that it will accept applications for voluntary retirement from employees with more than 15 years of service starting from that day.

An Amorepacific official said, "We posted a notice in the afternoon about accepting voluntary retirement applications," adding, "The number of reductions has not been decided yet."

The voluntary retirement target includes employees with more than 15 years of service working at domestic and overseas corporations and affiliates. Those retiring after 15 years of service will receive severance pay equivalent to their years of service plus 5 months' salary, and those with over 20 years of service will be paid consolation money equivalent to 40 months' salary.

Amorepacific is in urgent need of cost reduction due to ongoing business deterioration. Due to the THAAD issue in China and the impact of COVID-19, the growth momentum of its two main pillars, China and duty-free store performance, has been shaken, resulting in four consecutive years of sluggish performance.

As duty-free and department stores, the main sales channels for luxury cosmetic brands including Sulwhasoo, have collapsed, operating profit (848.1 billion KRW) has halved compared to the peak in 2016, the heyday (4.278 billion KRW as of last year). In the third quarter of this year, both sales and operating profit plunged by 23% and 49% respectively compared to the same period last year.

To revitalize its workforce, Amorepacific announced yesterday the next year's regular executive personnel appointment, appointing Kim Seunghwan, Executive Director of Group Human Resources and Organization and Head of Amorepacific HR Unit, as Vice President and CEO of Amorepacific Group.

This content was produced with the assistance of AI translation services.