With Samsung's Mobility Profitability Declining, they're Taking the Axe to Cut 30% of their Workforce
Yesterday we reported that while computer components helped Samsung's Q3 financials, the company admitted that the Galaxy S6's profitability declined. We had also reported at the top of the month that analysts had been continually cutting expectations on Samsung to make it easier for the Company to report a gain for the quarter. After the noise of Samsung beating their numbers, the news behind the scenes came to light. The Korean press is reporting today that "Industry watchers said Samsung Electronics is expected to fire up to 30 percent of its workers as it cuts back on the role of those who work in finance, human resources and marketing."
The report further noted that the "Samsung Group is increasing its reduction of managerial-level workers and executives as it seeks to become leaner and reduce costs amid an uncertain market outlook."
"Samsung's top priority is to save costs. Average workers with mediocre performance are being advised to leave the company with a sizable compensation," one official said.''
Another official, who asked not to be identified, said human resources officials at Samsung units were meeting with employees to persuade them to join the "voluntary retirement system."
"Underperformers and managers aged over 50 and officials who failed to be promoted to a higher level are the targets for the voluntary retirement program by Samsung," said the official.
Lastly, the report noted that "Samsung is increasingly being challenged in its smartphone business due to the rise of cheap Chinese vendors. In memory chips, which it has maintained the leadership for more than two decades, Samsung may be challenged in the near future due to advances by Intel in NAND chips and China's growing semiconductor business."
Does this really sound like a happy company who supposedly had a great quarter?