Korean travel, cosmetics and duty free sectors downsize in Covid-19 environment

South Korea’s travel agencies, cosmetics companies and duty free business have shed payroll amid protracted Covid-19 pandemic.

According to the Financial Supervisory Service on Monday, the workforce of the country’s six listed travel agencies shrank by 7.8 percent from the end of 2019 to 4,758 as of the end of September.

The nation’s top travel agency Hana Tour cut 146 jobs to 2,354 over the period, reducing its workforce by 5.8 percent. Mode Tour lost 91 jobs or 7.9 percent, Yellow Balloon Tour 75 or 13.6 percent, Redcap Tour 48 or 10.8 percent, Very Good Tour 26 or 7 percent and Sejoong 14 or 11 percent.

Cosmetics, hotel and duty free businesses also downsized their staff as sales were devastated by Covid-19 travel restrictions. The nation’s top cosmetics name AmorePacific lost 209 workers to reduce its workforce by 3.4 percent, LG Household & Healthcare cut 76 jobs or 1.7 percent and Aekyung Industrial 67 or 7.2 percent.

Workers at Hotel Shilla, Samsung Group’s hotel and duty free business unit, shriveled by 7.4 percent. Shinsegae reduced its payroll by 1.8 percent and Lotte Corp. 14.5 percent.

[Photo by Han Joo-hyung]

Due to the Covid-19 repercussions, Hana Tour posted an operating loss of 27.5 billion won in the first quarter, 51.8 billion won in the second and 30.1 billion won in the third. Hotel Shilla also kept its losing streak to the third quarter by recording 19.8 billion won worth operating loss. AmorePacific logged an operating profit of 56 billion won during the July to September period, but the black was down by almost 50 percent from 107.5 billion won in the same period last year. The cosmetics major will receive voluntary retirement applications for the first time since foundation.

Job loss in the tourism industry is expected to accelerate starting next month as the government’s payroll maintenance subsidy begins to expire. Hana Tour recently decided to extend the unpaid leave period that was supposed to end this month to next March. Mode Tour has also put more than 90 percent of its workers on unpaid leave since August.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]