Lotte dismisses long-time employees to develop communicative work culture
Lotte has made its staff younger by hiring new workers and dismissing longtime employees to change the organizational culture that causes rigid work environments.
The company is aspiring to develop young and communicative work culture.
Lotte Group Chairman Shin Dong-bin has been expressing concern about the lack of organizational culture caused by keeping its employees for a long time.
In particular, about 2,000 of the Lotte Department Store's 4,700 workers have worked there for over 20 years.
Meanwhile, Lotte Group's retail unit, Lotte Shopping, is closing down to reduce the rental costs for supermarkets and other stores that declining sales for consecutive years.
Lotte and Shinsegae, another South Korean retail giant, are implementing measures to cope with the challenges brought by online shopping trends and improve their business structures.
Shinsegae is trying to grow its e-commerce sector and had taken over eBay Korea to beef up its online sector with its e-commerce firm, SSG.com.
Shinsegae needs to increase its fulfillment centers to boost sales.
It has already secured 3.5 trillion won by selling real estate in Seoul, and it plans to reinvest the funds in eBay Korea and SSG.com.
Shinsegae is also preparing for the initial public offering of SSG.com, which has an estimated value between 6 trillion won and 10 trillion won.
Lotte and Shinsegae faced strong new rivals brought about by the pandemic, such as Coupang, Naver, and Market Kurly.
These three online retailers have grown explosively amid the social distancing measures.