SEOUL, Nov. 19 (Korea Bizwire) – South Korea’s top conglomerate Samsung Group has shed more than 5,000 jobs over the past year, data showed Thursday, reflecting its struggle to cut costs amid a prolonged economic slump.
The key affiliates of South Korea’s iconic conglomerate saw their combined workforce reach 212,331 as of end-September, compared with 217,685 a year earlier, the data compiled by the Financial Supervisory Service showed.
Group flagship Samsung Electronics Co.’s payroll came to 98,577 as of end-September, down 999 from a year earlier. Samsung Display Co.’s employees also dropped by 1,339 to 25,599 units.
Samsung Electronics has been suffering from plunging profitability of its handset business, especially due to the rise of Chinese players rolling out price-competitive models.’
Other smaller affiliates also rushed to cut employees.
Samsung Electro-Mechanics Co. and Samsung SDI Co. laid off 814 and 687 workers, respectively, over the cited period.
Samsung C&T Corp., born out of the merger between then-Samsung C&T and fashion arm Cheil Industries in September, also eliminated 602 jobs, with most of them being from the construction division.
Samsung Engineering Co., which posted a net loss of more than 1 trillion won (US$854 million) in the third quarter, eliminated 700 workers over the previous year. Samsung SDS Co., Samsung Card Co. and Samsung Securities Co. also fired a handful of workers.
Only Samsung Heavy Industries Co. and Samsung Fire & Marine Insurance Co. managed to increase their payrolls by 167 and 129, respectively, over the cited period.
Industry watchers expect that Samsung Group will commence full-fledged efforts to cut more jobs in the near future.
With the family-controlled group scheduled to shake up executives next month, Samsung may seek a further structural reorganization, especially in line with its latest efforts to pave the way for the new heir.
Lee Jae-yong, the only son of Samsung’s de facto head Lee Kun-hee who has been hospitalized since May 2014, has been seeking various bold decisions to streamline the group’s business portfolio.
The latest moves included selling its chemical assets to Lotte Group, a retail giant, for about 3 trillion won. Lotte said it will establish a new entity in February and finalize the deal within the first half of next year.
Samsung sold its defense and chemical units to Hanwha Group for an estimated 2 trillion won last year. The deal has been completed, and the affiliates have replaced the Samsung title with Hanwha.