Samsung electronics is going to be freezing salaries for its employees this year in South Korea and the move comes as a first in six years.
Unfortunately enough for companies, public image and lots of innovations do not really mean high profits even the company seems to be doing pretty well and has a well off standing in the market. As far as we know, Samsung has had it good for quite some time now with its stable supplier contracts a satisfaction flow of products and an image, which its competitors would love to have. But still the company is finding itself in the middle of falling profits and it has thought of a perfect way to improve its financial position with a salary freeze.
Samsung electronics is going to be freezing salaries for its employees this year in South Korea and the move comes as a first in six years. Samsung released its earnings report for QR 2014 a few days ago and unfortunately painted a rather grim picture. A report by Reuters has suggested that it does not appear out of context that Samsung is trying to fix things starting off on its home turf in South Korea and freezing salaries is also not an unusual way of dealing with profit declines.
Samsung reported its first ever profit decline in 2011 and since then it has gradually being losing its market share to the iPhones and the cheaper alternatives such as Xiaomi. The company has high hopes for its Galaxy S 5 smartphone which is going to be unveiled at the March 1st event and it is likely that its sales growth gains momentum again raising revenues. According to the company’s spokeswoman, the salaries for the executives had already been frozen for 2015 prior to this latest announcement for salary freeze for employees. “The measures are likely to inject a sense of crisis into employees, who have enjoyed study wage increases and hefty bonuses in recent years,” said Chang Sea-Jin, a business professor at Korea Advanced Institute of Science and Technology and author of the book “Sony vs Samsung”.
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