Lotte Group, which has declared “New Lotte,” will re-group its affiliates into four sectors and reduce the number of employees and the role of its top decision-making body by half.
The group held a meeting for reorganization on December 20 and completed its reorganization plan which regroups its affiliates into four divisions – retail, hotel and resort, food and beverage and chemical.
Lotte Group plans to implement the organizational realignment starting from January next year after having additional discussions on details and approval of chairman Shin Dong-bin.
The reorganization plan, which turns the whole group into a new conglomerate, is the start of “New Lotte” that chairman Shin emphasizes. In October, Shin announced its management innovation plans which include the reduction of its policy headquarters. It showed its will to change its management paradigm from “quantitative growth” to “qualitative growth” in the future.
The group plans to re-classify its 93 affiliates into four business sectors as part of the measures to seek qualitative growth. Moreover, it will slash down a considerable number of units and maintain its essential units in charge of coordinating business between affiliates, investing and hiring employees and improving its public images.
In order to wipe out its corporate image that is stingy about domestic investment, Lotte Group will increase the annual investment from current 6 trillion to 7 trillion won (US$5.02 billion to 5.86 billion) to 40 trillion won (US$33.46 billion) and hire 70,000 new employees in the next five years, carrying out massive investments. The group will expand 1 trillion to 2 trillion won (US$836.47 million to 1.67 billion) on an annual basis. It will also increase the employment of young workers by 10 percent every year and maintain the ratio of female in new employees at 40 percent.