Homeplus, the South Korean discount store chain undergoing court-led rehabilitation, closed applications for its voluntary retirement program just eight days after opening them, as workers applied in large numbers even without severance incentives. Analysts said employees are choosing to leave as job insecurity mounts amid an uncertain outlook for the company's turnaround and a potential sale.
Homeplus said on the 15th that it ended the application window early "because a large number of employees applied, although we had been accepting applications within the originally announced period."
The company had planned to accept applications from the 7th through the 22nd, but closed the process on the 14th as the number of applicants exceeded expectations, ending the program eight days ahead of schedule.
The labor union estimates that 400 to 500 employees applied. The company has not disclosed an official figure, so the exact number remains unconfirmed.
The program offered no separate severance incentive, providing only unpaid wages, Chuseok holiday bonuses and statutory severance pay. Departures are set for the 31st of this month. Homeplus plans to pay the unpaid wages, holiday bonuses and severance in a lump sum on the 14th of next month.
Prolonged financial difficulties and job insecurity are seen as the reasons applicants flooded in despite the absence of additional compensation. Store closures have continued during the rehabilitation process, deepening uncertainty over employees' jobs.
Homeplus operated 126 stores nationwide before the rehabilitation process began, but the number has fallen to 67 as it shut down less profitable outlets. Nearly half of its stores have disappeared.
The store closures have also strained workforce management. About 50% of all employees have been placed on paid furlough, according to industry sources. With revenue shrinking while fixed costs such as rent and labor expenses persist, the company faces urgent pressure to improve its cost structure.
The retirement program gained momentum quickly. On the 15th of last month, Homeplus held its first closed-door meeting with the labor union since its rehabilitation plan was approved, discussing workforce management measures aimed at restoring normal operations. Voluntary retirement was raised as one option at the time, but the company said it had "no substantive implementation plan."
Roughly three weeks later, however, the company formally launched the program and then shortened the application period as applicants poured in. Analysts said employee departures are materializing as uncertainty over the turnaround persists.