Korea's No. 2 travel agency Modetour Network to downsize amid snowballing losses

[Photo by Yonhap]

South Korea’s second-largest travel agency Modetour Network Inc. has chosen to downsize under the blow of yearlong pandemic crisis amid little sign of when international travel will normalize due to outbreaks of new virus variants.

The travel firm on Friday notified its employees that it would receive applications for voluntary early retirement on July 1-9 as it struggles to stay afloat amid protracted whammies from consumer boycott to traveling Japan to Hong Kong turbulence and pandemic crisis.

Senior executives already submitted their resignation to the company before the announcement.

Employees who take up the offer will be entitled to compensation benefits, financial support for changing jobs and school expenses for children, etc.

The latest announcement came as a surprise as Modetour Network had stubbornly maintained its payroll on the will of chairman Woo Chong-woong while others scaled down by sending employees to unpaid furlough.

The management could carry out massive layoffs upon low participation ratio in voluntary retirement, which could stoke violent clash with employees.

Modetour Network logged an operating loss of 21.1 billion won ($18.7 million) last year with sales down 81.6 percent on year to 54.7 billion won.

Modetour Network shares were trading 2.39 percent lower at 26,600 won in Seoul at 2:24 p.m. Monday.

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