The business report of Kyungdong Pharmaceutical reveals that the company’s annual sales for last year amounted to 162.6 billion won. This marks a decrease of 20 billion won from the previous year’s sales of 182.7 billion won.
The issue at hand is the company’s operating profit, which experienced a significant decline from 15.7 billion won in 2021 to 8.3 billion won in 2022. This resulted in a deficit for the company, with an operating loss of 25 billion won for the previous year. In response to the decrease in performance, the company underwent restructuring, resulting in a decrease in the number of employees from nearly 600 in 2022 to 400 within a year. According to insiders, the decision to reduce a third of all employees indicates the severity of the situation for the company, as restructuring is typically only implemented in times of crisis.
Despite the company’s concerning crisis, CEO Ryu Ki-sung of Kyungdon Pharmaceutical reportedly received a higher salary of 820 million won last year, which was 170 million won more than the previous year. On the other hand, CEOs of other companies such as GC Green Cross and Ildong Pharmaceutical received lower annual salaries due to undergoing restructuring as a result of poor performances.
In 1976, Chairman Ryu Deok-hee established Kyungdong Pharmaceutical, a medium-sized pharmaceutical company. In 2006, the eldest son of Chairman Ryu, CEO Ryu Ki-sung, joined the company and was appointed as vice chairman. In 2014, he became the CEO. Following Chairman Ryu’s resignation in 2021, Ryu Ki-sung is now co-managing the company with professional manager Kim Kyung-hoon as co-CEO.
Despite facing financial difficulties, the company persisted in investing heavily in advertising, causing skepticism among online users. Just last year, popular singer IU renewed her contract as the face of Kyungdong for an additional two years. As one of the most sought-after artists, IU was reportedly paid an annual model fee of 1 billion won. In addition to IU, Kyungdong recently welcomed Dex, a rising YouTuber who has been gaining attention through various entertainment shows, as their new brand ambassador. It can be assumed that the company offered a substantial sum to secure Dex’s endorsement, given his growing popularity.
The article can be found at daum.
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