Hite-Jinro likely to slash workforce

Hite-Jinro is accepting early retirement applications and industry sources say 10 percent of its total workforce may be set to leave the company.

The brewer is expected to embark on a major restructuring of its personnel from next month.

Up to 200 staff are likely to retire, including senior executives, sources say, with most cuts coming from the sales department.

Applicants will reportedly receive at least one year’s annual salary in addition to a separate severance pay.

The massive voluntary layoff comes as the brewer moves to recalibrate its internal sales network, industry figures say.

After Hite Brewery acquired Jinro six years ago, their sales networks were regulated by the government. Before the M&A, the two controlled around 60 percent of the domestic beer and soju markets.

As the regulation expired this year and the government stepped back, the company began trying to better integrate the two networks. But different approaches and ideologies caused clashes and rifts, undermining the goal of a strong synergy effect, sources say.

To improve efficiency, Hite-Jinro changed the system of having one director from each side man all sales offices.

The brewery ceded its role as the No. 1 market player to rival Oriental Brewery in January after 15 years at the top and is moving aggressively to reclaim its crown. The cull is seen as a part of this larger game plan.

“Employees will be notified soon, after the scale of the planned downsizing has been determined,” said a senior-level employee at Hite-Jinro.

By Kim Jung-yoon [kjy@joongang.co.kr]