Retailers, food firms rush to reduce workforce amid economic downturn

Paris Baguette at Summarecon Mall Bekasi in Jakarta, Indonesia, is crowded with customers, March 14. SPC's Paris Croissant, which operates the bakery brand, has started accepting voluntary resignations this month. Courtesy of SPC

An increasing number of retailers and food firms are introducing voluntary retirement schemes for their employees as businesses struggle with falling sales and rising costs, according to industry officials, Wednesday.

Older employees and those with longer career experience are targets of the downsizing. Companies are offering incentives like jobseeker training and supplementary funds to cover education for applicants' children or other daily living costs.

Local e-commerce platform 11street has begun accepting resignations from employees aged 35 or older who have worked for five years or longer. Those who quit due to "operational difficulties," according to the firm, can walk out with four months' worth of wages. The company has yet to set a number on resignations it is seeking and is watching how the workforce responds to the offer.

This is the first time in the company's 5-year history that it has taken such a measure. It has been on the market for acquisition, but its negotiations with candidate buyers continue derailing.

Lotte Homeshopping, another online shopping platform, has launched a similar measure in response to increasingly challenging market conditions. To streamline its structure, it is letting go of those aged 45 or older who have worked five years or longer.

Dairy product maker Maeil already started accepting resignations in August. It seeks to let go of employees aged 50 or older with a bundle of perks like a lump sum wage equivalent to 18 months, provision of supplies for congratulations-and-condolences for two years and a training session for jobseekers.

Paris Croissant is another local food producer that has been pushed to downsize its workforce. One of the two giant food product developers under SPC, the company began nudging employees who have worked 15 years or longer at its 14 sub-brands including Paris Baguette, La Grillia and Shake Shack Korea.

"We put up the notice internally about 10 days before the news broke earlier this month," said an official from SPC. "Incentives include a lump sum pay equivalent to up to 18 months, plus an education fund for a maximum one year. We are also giving resigning employees a session to help them start their own businesses or move to other firms."

While the firms are downsizing mostly out of managerial desperation, there are some that have been reducing workforces for different reasons.

GS Retail began accepting applicants for voluntary retirement until this month. But an official from the company said it has posted the notice every year, not because of operational setbacks but rather as a service.

"We are actually leading the market right now. Nonetheless, we introduced the measure years ago to rather support our employees in their late 40s and into their 50s to find new opportunities outside the company. Those in that age group automatically receive an email from our management notifying them of such opportunities," said the official.

"Office hierarchies in a pyramid structure naturally put senior employees in difficult positions at some point. So, our self-resignation practice rather helps those who decide to quit and start the next chapter of their life."