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"Reassigned Developers to Retail Stores": Internal Conflict Erupts Over E-mart Reorganization

[비즈한국] It has been confirmed that internal conflict has erupted at E-mart139480 during the process of dismantling its internal development department. As part of a recent organizational restructuring, E-mart transferred some of its development staff to its affiliate, Shinsegae I&C. While E-mart stated that the company transfers were based on "personal choice," some employees claim that the company effectively stripped them of that option by threatening to reassign those who did not agree to the transfer to retail stores.

Employees claim "It's a forced resignation," while E-mart maintains "Internal departmental reassignments are not subject to negotiation"

Recently, Shinsegae Group decided to relocate development personnel from the E-mart DT (Digital Transformation) Headquarters to its IT affiliate, Shinsegae I&C, through a "transfer" process (moving from the headquarters to an affiliate or subsidiary). The E-mart DT Headquarters was a three-year-old organization established in May 2021 by former CEO Kang Hee-suk, who emphasized the integration of online and offline services. The goal was to convert data secured by E-mart into actionable big data. Following the establishment of the DT Headquarters, E-mart recruited a large number of AI and IT-related professionals.

E-mart explained that this personnel reshuffling was conducted to "strengthen expertise in retail tech." An E-mart representative stated, "Shinsegae I&C is Shinsegae Group's dedicated IT company. To enhance IT expertise, some of the tasks previously handled by the E-mart DT Headquarters have been transferred to Shinsegae I&C, resulting in the movement of related personnel."

E-mart recently concluded the transfer process for the DT Headquarters' development staff, which began on June 21. As of July 15, the development team at E-mart's DT Headquarters officially became part of Shinsegae I&C, and departments such as the Data Planning Team, excluding the development staff, were integrated into the IT Headquarters. While E-mart claimed that "the transfer process proceeded smoothly as most development staff agreed to the move," the reality is different. Reporting by Biz Hankook has confirmed that there was significant conflict.

It is reported that the employees subject to transfer submitted statements of opposition, arguing that they were stripped of their right to choose regarding the relocation and that the personnel changes were carried out hastily. An employee formerly of the E-mart DT Headquarters claimed, "A company cannot force a transfer to another entity; it should be a decision based on the individual's desire. However, it was not a matter of choice. Even though the employees collectively submitted a statement refusing the move, the company pushed ahead with the transfer procedure."

Regarding the move of E-mart DT Headquarters development personnel to Shinsegae I&C, Shinsegae had previously stated that "transfer is a choice, not an obligation." The implication was that they would listen to employee feedback and only transfer those who consented. However, employees voiced in unison that the move to Shinsegae I&C was carried out in a semi-coercive manner.

The aforementioned employee stated, "The company informed us that those who did not agree to the transfer would be assigned to E-mart retail stores to perform tasks such as shelf stocking. Is moving personnel who only focus on numbers and programming to retail floor duties anything other than a measure designed to make us quit on our own (if we don't agree to the transfer)?" The employee added, "(Because of this) employees felt forced to agree to the transfer."

Currently, 90% of the employees subject to transfer have had their affiliation changed to Shinsegae I&C and are continuing the work they previously performed at E-mart. They still report to the E-mart headquarters as they did before. The remaining 10% who did not agree to the transfer were reassigned to retail stores as of the 15th. With the exception of a few staff members designated for task handover, the rest are working on-site at the stores.

E-mart explained that there were no issues with the transfer procedure and that the store assignments are temporary. An E-mart representative stated, "Although store assignments were mentioned at employee briefing sessions, this was to explain the transfer process. The explanation was that since non-consenting employees would need a reassignment of duties, they would undergo store training for the time being." They added, "Since we don't know who will agree to the transfer and who won't, we can't issue internal assignments in advance. Store training is being conducted to enhance their understanding of E-mart's on-site operations while the company reviews their job reallocation. The duration of this store training has not yet been decided."

Nonetheless, the representative stated, "Internal departmental assignments are not subject to negotiation. They vary depending on the company and the situation of each team," adding, "Since the non-consenting employees remain at E-mart and their departments are being reorganized, the company is managing personnel legitimately. While the company has not confirmed permanent store assignments for them, since they joined E-mart, they should accept that working at a store is just another area of the same job."

High-intensity restructuring since the beginning of the year, is internal noise growing?

Employees also raised complaints that the transfer process was rushed. An employee who worked at the DT Headquarters claimed, "It is possible that the company may have to move due to circumstances. The employees' request was simply, 'Give us time to wrap up our work.' This is because if the company structure changes hastily before tasks are completed, it could cause major problems for E-mart's operations." They continued, "The company says we should keep doing our existing work after the change of affiliation, but since the organization was dismantled, we have lost system access and are unable to process work properly."

According to some employees, E-mart notified DT Headquarters staff of the transfer plan on June 19. According to the original plan, the transfer was to be completed by June 30. This was a schedule that intended to finalize the entire process in less than two weeks after the initial announcement. However, as employee resistance grew, E-mart pushed back the completion date to July 12.

The employee mentioned earlier said, "The company says we are just changing our affiliation while doing the same work, but the employees disagree. If we receive services previously done by the DT Headquarters through Shinsegae I&C, it costs more than doing it in-house at E-mart. There is no reason for a company to spend more money to perform the same task. It just shows they have no will to sustain the services of the DT Headquarters." The employee lamented, "The moment E-mart stops those tasks, the staff moved to Shinsegae I&C will have nothing to do. Won't Shinsegae I&C eventually restructure or send them elsewhere? Job security is bound to become unstable."

The employee added, "Shinsegae has repeated these types of personnel procedures in a similar manner several times. I believe this is an unfair measure against workers and that such things should not be repeated."

Shinsegae Group has been pursuing high-intensity restructuring since Chairman Chung Yong-jin took office this year. In March, E-mart implemented a company-wide voluntary retirement program for the first time since its founding. Last month, it carried out restructuring targeting employees of E-mart Everyday, and at the beginning of this month, SSG.com also implemented a voluntary retirement program for the first time since its inception.

Regarding the personnel adjustments at the DT Headquarters, E-mart explained, "There was no coercion in the transfer process. Since employees may feel resistant to transfers, we are in the process of having dialogues and helping them understand. We also plan to conduct individual interviews with employees who did not agree to the transfer."