Samsung Electronics is set to cut payrolls by 10% next year, and general expenses by 50%, to offset the ongoing slump in the smartphone market, sources told The Korean Economic Daily.
The company recently begun downsizing its back-office operations including finance, personnel, and public relations, the sources said.
The South Korean company is having another difficult year in 2015 after experiencing in 2014 its first year of falling quarterly sales revenue, according to the Korean publication. Moreover, Samsung has to cut back on the number of senior manager positions given next year’s scheduled hike in the minimum retirement age from 55 to 60.
Samsung has already begun cutting back on general expenses, saving up to 1.8 trillion won ($1.5 billion) in marketing, sales, and administrative expenses in the first half of this year by holding back on budgeted spending.
“It remains to be seen whether and how Samsung’s preemptive move to restructure its business will have any impact on industrial sectors suffering from anemic financial results such as shipbuilding, shipping, steel, and petrochemical industries,” The Korean Economic Daily wrote.