Samsung Electronics Will Reduce Its Workforce By 10 Percent Due To Declining Overall Sales
Samsung Electronics is planning a layoff in their Seocho-dong headquarters in southern Seeoul. This move is prompted by the company's declining sales brought about by tight competition with Apple Inc. and other Chinese tech companies.
According to Korea JoongAng Daily on Wednesday, Samsung Electronics will be reducing their workforce in Seocho by 10 percent - from among 1,000 workers - and cutting expenses by half in 2016. The layoff will be directed towards seniors and managers as well as some employees set for promotion.
The reorganization will mostly affect the public relations, human resources and finance departments where workers who will voluntarily quit their positions will be offered retirement packages.
"It's true we have been under pressure to cut down on general expenditures," admits a Samsung spokesman "but it's hard to give a comment now - particularly on the percentage of workers to be fired."
Bloomberg has noted on Monday that Samsung Electronics' Galaxy smartphones has not fly well in the market, causing a decline in sales for five consecutive months. In turn, the company has lost $40 billion since April.
"Cutting jobs is the easiest way to control costs and Samsung's spending on mobile business could also be more tightly controlled," says an analyst at Nomura Holdings Inc. in Seoul Chung Chang Won. "Samsung's preparing to tighten its belt as it isn't likely see rapid profit growth in the years to come."
With smartphones once accounting to 70 percent of Samsung Electronics' operating profit, the current decrease in sales may imply a decrease in the company's revenue from 2015 to the succeeding years with 228.7 trillion won in 2013, 206.2 trillion for 2014 and 95.6 trillion won in the first half of 2015.
