profits

Feb. 24 (Asia Today) — Major South Korean food companies are expanding cost-cutting and restructuring efforts after operating profits fell by as much as 30% last year amid a domestic demand slump and rising costs, industry officials said Monday.

Lotte Wellfood is running a voluntary retirement program for some employees as part of efforts to streamline its organization, according to industry sources.

The program targets workers 45 and older with at least 10 years of service. In addition to statutory severance pay, eligible employees with 10 to under 15 years of service would receive 18 months of base pay, while those with 15 years or more would receive 24 months, officials said.

The package also includes a 10 million won ($7,500) re-employment support payment and up to 10 million won ($7,500) in university tuition assistance per child.

Lotte Wellfood said it plans to pursue growth strategies such as developing major brands and expanding global business operations while improving organizational efficiency.

Binggrae carried out a similar voluntary retirement program in January, citing cost increases and weakening consumption, according to industry sources.

CJ CheilJedang has also signaled tighter management. Chief executive Yoon Seok-hwan told employees in a message earlier this month that the company needs “disruptive change and innovation,” outlining plans for business restructuring, financial improvements and organizational culture reforms.

The restructuring push follows a downturn in earnings. Industry data show operating profit last year fell 20.6% at CJ CheilJedang, 30.3% at Lotte Wellfood and 32.7% at Binggrae compared with a year earlier.

Companies have faced pressure from raw material price volatility, higher logistics costs and slowing consumer demand. Executives have also cited stronger consumer resistance to price increases, limiting their ability to pass through costs.

Some analysts cautioned that repeated short-term cutbacks could weaken competitiveness over time unless companies deliver results from new growth initiatives.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260224010007289

Published on
11/02/2026 – 17:52 GMT+1

Spotify stocks spiked 6% higher at market opening this Wednesday, later paring down some of its gains, after the company released its earnings report on Tuesday.

The popular music platform closed 2025 with a little over €2.2bn in net profits which represents a 94% increase, almost double what was achieved the year prior.

The positive result reinforced the historic turnaround the firm accomplished since 2024, when it became profitable on the year for the first time. Before then, Spotify operated at a loss for almost two decades after being founded in 2006.

Last year, the music streaming platform grew in users by 11% and in paying subscribers by 10%. Additionally, Spotify also cut costs and increased prices in several markets achieving a 33.1% profit margin, the highest in its history.

A substantial part of the success in 2025 occurred towards the end of the year, when the company hit a total of 751 million monthly active users (MAUs), after its biggest quarterly increase in activity.

For the first quarter of 2026, Spotify is projecting a continuation of this trajectory. The report points to around €4,5bn in revenue and 759 million MAUs.

The Swedish executive chairman and founder, Daniel Ek, who resigned from the CEO position last month, stated in the earnings call that Spotify has “built a platform for audio but increasingly to all other ways in which creators connect to the public”.

The new CEO, Alex Norström, also declared that “after a year of execution, 2026 will be the year of elevating ambition”.

Music industry and AI

The impact of Spotify’s growth in 2025 was also felt outside the company, in the music industry as a whole.

The firm paid out more than €11bn to artists last year which the earnings report states is “the largest annual payment to music creators by any platform in history”.

Moreover, the Swedish company stated that “we also helped artists generate over one billion dollars in ticket sales, connecting fans to live events”.

Going forward, one of Spotify’s biggest bets is on AI integration, as is the case for most tech companies.

The firm has accelerated the launch of tools such as a playlist generator based on prompts, and a personalised agentic DJ, which have already been used by millions of paying subscribers.

However, artificial intelligence is also presenting new problems for Spotify such as AI-generated music. In the earnings call, the co-CEO, Gustav Söderström, stated that “the issue isn’t new but it has scaled”.

Söderström added that the company is working closely with the music industry to allow artists and record labels to include disclaimers specifying the production methods.