Reducing In-Store Staff, Increasing Online Developer Hiring

Lotte Shopping's Q1 Staff Count Down 10% from 2019
Emart and Shinsegae Down 4%
Consumer Market Shifts to E-commerce... Crackdown on Talent Drain Including Developers

Big Market Dobong Branch was closed in November last year due to Lotte Shopping's store restructuring. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Jo In-kyung] As the distribution industry undertakes restructuring and asset securitization centered on offline stores with declining profitability, the workforce structure is also rapidly changing. As offline stores close one after another, the number of employees, especially frontline workers such as sales staff and cashiers, has sharply decreased.

Sharp Decline in Number of Employees Due to COVID-19 Impact

According to Lotte Shopping's 2021 Q1 business report on the 28th, the number of employees at Lotte Shopping was 22,348, down by more than 2,400 from 24,761 in Q1 of last year. In just one year, the total number of employees decreased by 9.7%. Compared to Q1 2019, the total number decreased by 2,486, a 10.0% reduction. Over the past two years, 331 employees were cut from department stores, 1,082 from marts, and 1,073 from other businesses including supermarkets, LOBs, and e-commerce.

The rapid workforce reduction was due to large-scale store closures last year. In February last year, Lotte Shopping announced a restructuring plan to close about 200 unprofitable stores out of approximately 700 offline stores, closing over 110 stores including department stores like Cheongju Young Plaza, Lotte Super, Hi-Mart, and LOBs (H&B stores). Early this year, Lotte Mart also accepted voluntary retirement for the first time since its founding.

Emart also saw its number of employees decrease by 1,069 (4.1%) to 24,965 at the end of March this year compared to March 2019. The workforce shrank as specialty stores such as Pierrot Shopping and Boots withdrew. The combined number of employees at Emart and Shinsegae is 27,651, a 4.0% decrease over two years. GS Retail's employee count, which exceeded 10,000 in 2019, has dropped to 6,817, a decrease of 3,206 or 32.0%. This is due to the closure of unprofitable directly operated supermarkets and H&B store Lalavla locations.

Homeplus had 22,179 employees as of January last year, down 990 from 23,169 the previous year. It has decided to sell five stores so far, and among them, the Daejeon Tanbang store closed early this year, so the decrease in the number of employees is expected to be even greater.

"Developers Wanted"

As the consumer market rapidly shifts from offline stores to e-commerce, companies are actively recruiting developers for their online businesses. Lotte On plans to hire up to 150 additional developers this year to enhance its development capabilities. SSG.com granted stock options to all in-house developers. GS Retail is also cracking down on internal developer turnover and expanding the recruitment of key talent in preparation for its merger with GS Home Shopping, aiming to integrate customer data and expand infrastructure.

A distribution industry official said, "There is a growing sense of crisis that the reversal of online and offline markets after COVID-19 is imminent," adding, "Considering that many employees who used to work in offline stores have been reassigned to tasks such as picking and packing products for online malls, the scale of workforce structural changes will be even greater."

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