Samsung restructuring workforce to cut costs

Samsung is said to be planning to lay off managerial-level workers and executives in order to cut costs. In September, it was reported that Samsung was reducing its management staff, but the company dismissed layoff reports saying it was only relocating its workforce.

The Korean Times now claims to have spoken to a Samsung official who says that "Samsung's top priority is to save costs. Average workers with mediocre performance are being advised to leave the company with a sizable compensation". He adds that the company's latest move is in line with a plan to lay off workers in its manufacturing units.

Another official who wished to remain anonymous said HR officials were trying to persuade the employees to opt for a voluntary retirement scheme (VRS). "Underperformers and mangers aged over 50 and officials who failed to be promoted to a higher level are the targets for the voluntary retirement programme by Samsung C&T," he added.

While both the officials did not reveal how many workers would be affected, industry watchers expect Samsung to cut its workforce by up to 30% of its in finance, human resources and marketing.

Samsung's heavy industries is said to be accepting VRS letters from employees in all divisions hit by losses. The shipbuilding unit is expected to face operating losses in excess of one trillion wons (£5 66.9m) in 2015. Samsung SDI, the battery unit, has been rumoured to follow a similar practice. Samsung's Electro-Mechanics, the component affiliate, also plans to reduce its workforce.

Samsung is expected to announce a reshuffle of top and middle-level executives in early December, and several division heads could be replaced by younger employees.