Global cosmetics company L'Oréal Group is clashing with employees in Korea over the downsizing of offline stores and workforce management. While the labor union is leading claims of job insecurity and worsening working conditions, the company says the measures are necessary for business needs and operational efficiency.
According to the industry on the 15th, labor and management at L'Oréal Korea have recently shown differences during working-level talks on their collective agreement over store operations and staffing. The two sides have held eight working-level negotiations from March to on the 12th this year, but have not narrowed their differences.
The union says the downsizing of stores and headcount cuts are worsening the offline sales environment and is demanding that the company establish safeguards for job security. The union argues that as labor shortages increase the workload on the ground, management has fueled job insecurity by pushing to expand dispatched and nonregular workers.
The company's ongoing restructuring of its offline business and the resulting store optimization efforts are cited as the backdrop of the conflict. For several years, L'Oréal Group has been adjusting its distribution strategy at a global level to diversify revenue and respond to the expansion of online channels.
While e-commerce growth is accelerating in North America and Europe, the downturn in duty-free channels has continued in North Asia, centered on China. In the first quarter of this year, L'Oréal's sales in Europe and North America were about 4.4 billion euros (about 7.6805 trillion won) and 3 billion euros (about 5.2367 trillion won), up 11.5% and 2% from a year earlier, respectively, but North Asia sales stayed at 2.7 billion euros (about 4.7141 trillion won), down 9%.
L'Oréal Korea has continued restructuring the offline business of some brands since last year. In June last year, it decided to withdraw the Yves Saint Laurent and Lancôme brands from the Lotte Duty Free Busan store, and early this year it decided to end domestic offline store operations for Valentino Beauty. On the other hand, it expanded listings on online channels such as Coupang R.LUX and Market Kurly's Beauty Kurly, increasing the share of online sales.
Along with adding store staff, the union demanded the establishment of minimum staffing standards, improvements to criteria for personnel appointments, and expanded support for commuting and remote assignments. It is known to have proposed principles such as placing at least three full-time employees at store counters and assigning employees within a round-trip travel time of three hours for personnel moves.
The union said, "On the ground, we have endured everything for a long time amid small headcounts, increased workloads, and deepening job insecurity," and added, "Our demand is to establish realistic staffing increases and humane personnel transfer principles for job security and stable jobs."
In addition, it is demanding improvements to leave and welfare systems, including paid training for new union members, refresh leave, provision of work cellphones, various leave for family events and pet funerals, holiday points, and team-building expenses. The company, however, said that because these conflict with management and personnel authority, it is difficult to accept many of the demands.
The view is that the union's demands conflict with personnel and management authority. During talks, management said, "This is a time when the company needs change," and added, "These are measures for efficient staffing, not headcount reductions." It also said, "Only if the company grows can we talk about benefits (compensation)."
A L'Oréal Korea official said, "We are steadily redefining our strategy to meet consumer needs at every online and offline touchpoint," and added, "Through continued dialogue with the union, we are discussing matters from various perspectives and will do our best to reach an agreement based on mutual respect and trust."