Ah, Samsung Executives to Get Pay Cut due to Disastrous Q3
In July we posted a report titled "Angry Samsung Takes Back Billions in Bonuses from 100 Samsung Mobile Division Executives for Poor Performance." Since that time, Samsung's sales have declined further and in the last quarter, profits dramatically collapsed, especially in their mobile and display businesses. In the last week, Samsung made the decision to freeze most salaries while reducing salaries to executives in divisions that didn't perform. Earlier today we report that Samsung's flagship Experience Store in London shut its doors due to poor sales and inability to match the Apple Store experience. What a gloomy holiday time it'll be for Samsung sales and retail executives.
According to a Korean report published earlier this week, "the Samsung Group is expected to freeze or cut wages for 10 percent of its employees after the company decided to freeze or cut wages for about 2,000 executives due to a huge drop in earnings."
The report noted that on Dec. 21, the Samsung Group finished employee performance evaluations. The evaluations will affect employee wages depending on the profits of its affiliated companies. As most affiliates of the business group, including Samsung Electronics, have struggled with the decline in earnings, it is expected that they will experience drastic cuts to incentives and bonuses.
Samsung Electronics suffered a 19.7 percent drop to US$43.16 billion in sales for Q3 from the same period in the previous year, while its operating profits dropped 60.5 percent to US$3.69 billion.
The operating profits of Samsung Display and Samsung SDI, which are heavily dependent on Samsung Electronics, fell by 94 percent and 83 percent, respectively, compared with the previous year.
Lastly, the report noted that Samsung Electro-Mechanics recorded US$62.85 million in operating losses in the third quarter of this year. All in all it was a disastrous Q3 for Samsung and may not get any better this quarter as Samsung tries to rid itself of old inventory.
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