Layoffs are planned at Samsung Electronics

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Layoffs are planned at Samsung Electronics

Samsung Electronics will lay off workers at its headquarters in Seocho-dong, southern Seoul, in response to its declining revenue, according to the Korea Economic Daily on Tuesday.

The local daily said that the top smartphone producer would reduce the number of administrative workers at its Seocho headquarters by 10 percent and halve ordinary expenditures by next year.

Some 1,000 people work at the office, and the plan is expected to target high-level employees on the verge of becoming executives.

The restructuring will mostly take place in the finance, human resources and public relations departments, the paper said. The company will offer retirement packages to some in exchange for stepping down voluntarily, whereas others will be sacked outright.

A Samsung spokesman said he was unable to comment on the report.

“It’s true we have been under pressure to cut down on general expenditures,” he said, “but it’s hard to give a comment now - particularly on the percentage of workers to be fired.”

The unconfirmed plan comes less than a month after Samsung Group announced it would hire 10,000 entry-level workers across its subsidiaries - including Samsung Electronics - by 2017.

President Park Geun-hye said in the presence of 17 heads of major Korean conglomerates at the Blue House in July that she hopes to see companies expand positions for young people and help boost the sagging economy. Samsung and other conglomerates scrambled to draw up ambitious hiring plans that will last through the president’s term, which has less than three years left.

Samsung Electronics is widely projected to see its revenue for 2015 decrease year-on-year, mainly because it has sold fewer smartphones, a key revenue contributor that once accounted for 70 percent of the company’s operating profit.

The company sold 72.02 million smartphones worldwide in the second quarter, down 5.3 percent year-on-year, according to market researcher Gartner on Aug. 24.

Its share of the smartphone market also declined from 26.2 percent to 21.9 percent over the same period.

Samsung Electronics also saw its revenue retreat. In the first half of this year, its revenue totaled 95.6 trillion won ($79.7 billion), compared to 206.2 trillion won for all of 2014 and 228.7 trillion won in 2013.


BY SEO JI-EUN [seo.jieun@joongang.co.kr]

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