Korean retailers add fewer jobs in 2022 due to weak consumption

Samsung Electronics building [Courtesy of Samsung Electronics]

South Korean companies in retail and financial sectors rolled back hiring in 2022 due to weak consumption and remote working environment in a pandemic era, although payrolls at information technology (IT) companies rose to lift up overall employment of top 500 firms.

According to business data tracker CEO Score on Wednesday, the net employment figure of 460 out of top 500 companies by sales stood at 22,334 in 2022, up 1.5 percent from the end of 2021. Forty companies that showed a gap of more than 10 percent from a year ago due to spinoffs or mergers during the survey period were excluded from the data.

Net employment in the IT and electronics sector accounted for the largest 75.3 percent of the total net employment with 16,819 jobs, followed by construction and building materials, food and beverages, transportation, cars and parts, shipbuilding, machinery and facility, petrochemicals, and drugs.

Samsung Electronics added 6,768 new jobs last year, contributing to more than 30 percent of the total increase in net employment. It is the only company among five major conglomerates in Korea to recruit new employees regularly, hiring 2,863 employees in September and October last year.

LG Innoteck, which reported record-high earnings for four consecutive years, also added 2,716 jobs. The company is also expected to create more than 1,000 jobs a year for several years under an investment agreement with the city of Gumi in North Gyeongsang Province, for camera module production in July last year.

Payrolls, on the other hand, declined in the retail, banking, telecommunications, and insurance sectors. The largest fall was from retail with 5,377, followed by banks, telecommunications, insurance, trading companies, household goods, and securities.

The retail sector underwent restructuring including layoffs due to worsening profitability after the pandemic, and banking and insurance sectors added fewer jobs after branch reduction and voluntary retirement amid a recent shift toward digital finance.

By company, Coupang Inc. saw the largest fall in net employment in 2022 at 4,903, followed by Emart Inc., and Lotte Shopping Co.

Payrolls at Citibank Korea dropped by 1,048 due to a large-scale job cut following the reduction in retail banking services. Samsung Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co., and Hyundai Heavy Industries Holdings Co. also added fewer jobs.

KT Corp., in the meantime, was the only telecommunication service provider among the top three industry players that saw its net employment decline.