Samsung to Cut 10% of Head Office Staff, Economic Daily Says

Updated on

Samsung Electronics Co. is preparing to cut 10 percent of workers at its headquarters, according to a Korean newspaper, as the world’s biggest smartphone maker loses sales to Apple Inc. and Chinese vendors.

Samsung is targeting workers in the human resources, public relations and finance departments, Korea Economic Daily reported Tuesday, citing people it didn’t identify. The Suwon, South Korea-based company also plans to cut some expenses next year, the report added. Samsung declined to comment in an e-mail.

The moves come after new high-end Galaxy smartphones failed to impress consumers, triggering five straight monthly declines and wiping out more than $40 billion in Samsung’s market value since April. The company’s share of global smartphone shipments fell more than 3 percentage points in the second quarter, and it’s no longer the top seller in China, the world’s biggest mobile-phone market.

“Cutting jobs is the easiest way to control costs and Samsung’s spending on mobile business could also be more tightly controlled,” said Chung Chang Won, an analyst at Nomura Holdings Inc. in Seoul. “Samsung’s preparing to tighten its belt as it isn’t likely see rapid profit growth in the years to come.”

The company had a total of 98,999 employees at its headquarters as of June 30, according to a regulatory filing.

Samsung shares rose 1.7 percent to 1,131,000 won in Seoul, paring their decline this year to 15 percent.

Samsung tried to attract customers before this week’s product launch from Apple by advancing the release of new Galaxy models. Yet that failed to ease market concerns about its second-half earnings, when technology companies typically benefit from the year-end holiday shopping season.

Samsung, which had 206.2 trillion won ($171 billion) in sales last year, is estimated to post about 200.2 trillion won in sales this year, according to data compiled by Bloomberg.

(Adds closing share price in sixth paragraph.)

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE