More than 280,000 workers at Homeplus supplier companies lost their employment insurance coverage over roughly the past year and a half, with more than 38,000 filing for unemployment benefits, according to newly released government data. The figures suggest the retailer's financial difficulties have rippled through its supplier network. The government has moved to minimize damage to suppliers as Homeplus seeks to resume its court rehabilitation process.
Data submitted by the Ministry of Employment and Labor to People Power Party lawmaker Jo Ji-yeon's office show that 193,892 workers at Homeplus supplier companies lost employment insurance coverage last year, with another 92,996 losing coverage through May this year. The cumulative total from last year through May comes to 286,888.
Unemployment benefit applications from supplier workers reached 25,616 last year and 12,915 through May this year, for a combined total of 38,531. The Ministry of Employment and Labor said the supplier figures were compiled based on the business registration numbers of tenant operators and vendors, and noted that the data include not only businesses directly operating inside or supplying Homeplus stores but also head offices and other affiliated entities.
Industry observers believe Homeplus's financial troubles contributed to the rise in job losses among supplier workers. As of February, 1,761 companies operated stores inside Homeplus locations and 1,545 companies supplied goods to the retailer. According to the Korea Federation of SMEs, small and midsize Homeplus suppliers were owed an average of 774 million won ($522,000) in unsettled payments.
The total outstanding payments Homeplus owes suppliers stood at about 410 billion won as of late April. Public-interest claims — debts that take priority in rehabilitation proceedings — totaled 1.1 trillion won as of late May.
Homeplus has secured 200 billion won in debtor-in-possession financing from its largest creditor, Meritz Financial Group, and is working to normalize operations. On Monday, the company filed an immediate appeal against the Seoul Bankruptcy Court's decision to terminate its rehabilitation proceedings.
If the court accepts the appeal, the deadline for Homeplus to win approval of its rehabilitation plan would be extended to as late as Sept. 4. The company is aiming to resume full operations next month.
However, the prospects for a successful rehabilitation remain uncertain. About 5,000 employees left the company in the first half of this year alone. Homeplus still faces the task of persuading suppliers to resume deliveries and reopening stores that have suspended operations.
The government is also working to limit the damage to Homeplus suppliers. The Ministry of Employment and Labor has set up dedicated Homeplus response counseling desks at regional offices to provide services including wage claim support, livelihood loans, unemployment benefits and job placement assistance. Suppliers struggling financially can also apply for employment retention subsidies.
"When workers are forced to leave their jobs due to Homeplus closures or contract terminations, we are connecting them with fast-tracked unemployment benefits as well as job counseling, vocational training and other reemployment support services," a ministry official said. "We will actively respond through ongoing monitoring to stabilize workers' livelihoods and minimize employment insecurity."
mp1256@heraldcorp.com
