Affected Samsung employees wary about future

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Affected Samsung employees wary about future

With Samsung Group deciding to sell its chemical and defense businesses to Hanwha, questions arise over the future of employees of those affiliates.

In previous sales, Samsung gave affected employees the opportunity to move to other Samsung affiliates or cash compensation.

But with the scale of the deal announced Wednesday, which involves more than 8,000 employees, industry insiders will be watching closely to see how Samsung handles its employees.

Samsung Techwin has about 4,700 employees, Samsung Thales about 1,800, Samsung Total Petrochemicals about 1,500 and Samsung General Chemicals about 350.

Samsung Group said no decision has been made, but the deal stipulates that no workers will lose their jobs.

“Letters written under the name of each affiliate’s CEO are expected to be sent to employees soon with a message including the company’s vision,” said an official from Samsung Group.

However, employees of the four affiliates who move from the No. 1 conglomerate to No. 10 say they are nervous about their future and the atmosphere in offices is gloomy.

“It is very shocking, as we didn’t expect this would happen,” said a researcher at Samsung Techwin who asked not to be named. “We haven’t heard anything from the company about compensation or employment plans, but people here are already discussing their future.”

When Samsung Electronics sold its hard-disk drive assets to U.S. company Seagate Technology in 2011, it paid a maximum 50 million won ($45,200) and the cash equivalent of six months of base pay to each employee. In 2007, when Samsung C&T sold its distribution assets to Aekyung Group, it was reported that employees have received compensation equal to 54 months’ pay.

Most recently, when the semiconductor parts division at Samsung Tech was handed over to MDS in April, the company reportedly paid more than 60 million won to each employee.

However, compensation plans have not always gone smoothly. In November 2013, when Samsung decided to sell its stake in Samsung Corning Precision Materials, employees here first requested compensation of 300 million won each, but later agreed to receive 40 million won and 10 months of pay.

But Samsung employees say that even if they receive compensation, they worried a change of lifestyle and adjusting to a new corporate culture.

“Although we heard that job succession is included in the deal, who knows if we will be doing the same work after the M&A is finished,” said a Samsung Techwin employee.

Hanwha said it is confident it can integrate Samsung employees as the group has been through many M&As.

“It is not exaggerating to say that Hanwha Group’s growth has been done with M&As, but throughout the deals, there was no friction,” the group said in a statement. “We will combine the culture of Samsung and culture of Hanwha.”

However, industry observers speculate there could be a work force restructuring as the company will be too big.


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