Samsung will cut 10% of Korean Workforce

UPDATE: According to Yonhap News:

South Korea’s No. 1 tech giant Samsung Electronics Co. said Wednesday it is relocating a small portion of its workforce, denying rumors that it plans to reduce its management-related staff amid a slowdown in earnings.

“It will only be relocations of workers,” a high-ranking Samsung Electronics official said, denying the market’s rumor that the company will seek to cut 10 percent of its management staff in departments such as sales and public relations.

 
 

Samsung currently employs 320,000 workers worldwide, with around 100,000 hired in South Korea.

The official however, did not elaborate on the meaning of “relocations”.


As Samsung Electronic’s smartphone sales continue to fall, the company announced that it will slash 10 percent of the workforce at its headquarters in Suwon, South Korea –if the company holds to that number, it would amount to almost 10,000 people losing their jobs.

 
 

This announcement of layoffs comes following a fifth straight quarter of decline coupled with being the only company amongst the top five smartphone makers to lose market share last quarter. Samsung has seen its market value drop by more than $40 billion since April.

According to the Korea Economic Daily, the cuts will primarily come for workers in the human resources, public relations, and finance departments.

Samsung also plans to scale back their general expenses by 50%. They have reportedly already saved 1.8 trillion won ($1.5 billion) in office and sales expenses in 2015, the South Korean daily added.

The cuts come for the troubled South Korean technology giant after years of impressive growth that saw it rise to one of the world’s most recognizable brands. Despite the release of impressive new smartphones like the Galaxy S6 and S6 edge, the company has failed to effectively compete against Apple while at the same time losing market share on the low end to up-and-coming Chinese smartphone makers.

Chung Chang Won, an analyst at Nomura Holdings in Seoul, told Bloomberg that Samsung’s cuts to the workforce is “the easiest way to control costs,” alongside more tightly-controlled spending.

Samsung stock rose 1.7 percent to 1,131,000 won in Seoul after news of the coming cuts was released.

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