Samsung Group is Downsizing Across all Business Units

A Samsung Group communication official told reporters that the company is downsizing across all business units, including Samsung Electronics.

The Samsung Group is not performing as it has been in the past years. Sales in 2014 fell from 228.69 trillion KRW in 2013 to 206.21 trillion KRW, and the profit sank to 25.03 trillion KRW compared to 36.79 trillion KRW. Samsung is now taking action across all business units of the Samsung Group to optimize its cost structure.  

The Korean Herald reports that Lee Jun, Samsung Group’s top communications official, told reporters after a weekly regular meeting of presidents of Samsung affiliates: “As far as I know, each affiliate is conducting reshuffles of their staff, depending on its business situation.”

Each Samsung Group business unit will evaluate its workforce independently. The Samsung Group headquarters would stay out of it. The report cites industry watchers that predict that Samsung would shave off 10% of its workforce in 2015.

Samsung already has frozen the pay of executives in January as a result of the poor 2014 numbers. However, Samsung has good cards for 2015 with the recently announced Samsung Galaxy S6 and Galaxy S6 Edge to turn things around. A downsizing is also a typical exercise large companies go through when there is a down cycle. 

Samsung has taken the right steps with the Galaxy S6. It is now up to the consumers if they go for it or continue to migrate to Apple. As reported, Samsung is confident that the Galaxy S6 will outsell the very successful Galaxy S4 that established Samsung in the smartphone market as a leader.

Yesterday we reported that Apple has taken the crown away from Samsung in the 4th Quarter with higher iPhone sales than Samsung.