[Alpha Biz= Kim Jisun] Homeplus, currently undergoing court-led rehabilitation, has reportedly reversed its earlier promise to reassign employees affected by the temporary closure of 37 stores, further intensifying labor tensions.

According to the Mart Industry Labor Union’s Homeplus branch under the Korean Confederation of Trade Unions on May 12, the company notified the union in an official letter that even stores still in operation are experiencing sales declines of more than 70% year-on-year. As a result, it concluded that it cannot absorb additional personnel unless product supply conditions improve significantly.

“Accordingly, reassignment of employees from the 37 temporarily closed stores to other locations will not be implemented during the suspension period,” the company said.

Regarding the possibility of reopening the suspended stores after the shutdown period, Homeplus stated that it would be “difficult without securing additional liquidity funding under current internal and external conditions.”

Earlier, the company had announced on May 8 that it would temporarily suspend operations at 37 underperforming stores out of its total 104 locations from May 10 to July 3, focusing operations on the remaining 67 stores. July 3 is the deadline set by the court for approval of its rehabilitation plan. At the time, Homeplus had said it would provide shutdown allowances equivalent to 70% of average wages and offer reassignment opportunities to employees wishing to continue working.

The union claims that most employees earn close to the minimum wage, meaning shutdown allowances amount to around KRW 1.4 million per month. It also criticized the company for effectively blocking secondary employment due to internal rules prohibiting dual employment, leaving workers with limited options beyond relying on unemployment benefits after resignation.

“The company reassured employees with promises of reassignment until the day before the shutdown, only to reverse its position immediately afterward,” the union said in a statement, calling for concrete livelihood support measures, including exceptions to the dual employment ban.

The union further attributed the crisis to management failures by the company’s largest shareholder, MBK Partners, and urged the government to take action, including appointing an independent third-party administrator to stabilize the company.

Homeplus responded that it plans to proceed with reassignment once it secures debtor-in-possession (DIP) financing and achieves a degree of operational normalization at the remaining 67 stores through focused management efforts.

 

 

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