SEOUL, Apr. 26 (Korea Bizwire) — Coupang Inc., a South Korean shopping portal, has transitioned into a tripartite leadership structure after recruiting a restructuring specialist as head of the human resources department, leading many to anticipate major restructuring of the company recently stricken with massive losses.
Coupang was previously led by a single representative structure under Kim Beom-seok, founder and CEO of the company.
Now, the company is run by three people, including new executive officers Go Myeong-ju and Jeong Bo-ram.
Kim, who used to oversee all aspects of the company, will now be in charge of the company’s strategy and planning sector. Go will lead the human resources department, while Jeong will be in charge of the fintech business.
This is Coupang’s very first time to go through a change in the leadership structure. Go, known for his reputation as an expert in company restructuring, is drawing particular attention.
Go was a former employee of Daewoo Motors and Hanaro Telecom, and was put in charge of company restructuring when SK Telecom took over Hanaro.
“Coupang’s operating deficit as well as payroll costs reached 1 trillion won (US$861 million) each last year as the company was stricken with the side effects of sales growth,” said a source familiar with Coupang.
“The company needs to go through some sort of restructuring.”
In 2017, Coupang’s payroll costs were 655.5 billion won. A year later, labor costs rose by more than 300 billion won, comprising more than 20 percent of Coupang’s total sales.
Experts argue that the hike in labor costs is a result of expanding logistics personnel to process an increasing amount of transactions, and introducing new services, such as Coupangplex, which led to recruiting more employees.
Some claim that a change in the leadership structure and company restructuring were part of the conditions put forth by Vision Fund of Japan’s SoftBank that decided to invest US$2 billion in Coupang last November, an allegation that the company currently denies.
Coupang, once a sensation in South Korea’s logistics market based on innovative services and aggressive investment, saw 4.4 trillion won in sales and 1 trillion won in operating losses last year.
While sales have expanded by more than 60 percent since last year, operating deficits have also increased by 71.7 percent, raising concerns in the market.
Experts argue that Coupang won’t be able to improve its financial performance any time soon if the company does not reduce its expenditures on payroll.
H. M. Kang (email@example.com)