Samsung Electronics’ Device Solutions (DS) Division executives have decided to freeze their salaries in response to the division’s deteriorating performance.
The executives of the Samsung Electronics DS Division held an emergency executive meeting on Jan. 17 to reaffirm their commitment to swiftly enhancing competitiveness and normalizing operations, leading to this decision.
Samsung Electronics explained, “The management and executives have formed a consensus that extraordinary measures and leading by example are urgently needed due to the decline in business performance, resulting in the decision to freeze executive salaries this year.”
Last year, Samsung Electronics reported a 14.58% decrease in annual revenue compared to the previous year, amounting to 258.16 trillion won (US$192.77 billion), and a significant 84.92% decrease in operating profit totaling 6.54 trillion won. Notably, this operating profit figure is the lowest since the 2008 financial crisis.
The decline in Samsung Electronics’ performance is primarily attributed to the semiconductor downturn impacting the DS Division. The DS Division recorded a cumulative loss of 12.69 trillion won from the first to the third quarter of last year. Consequently, it was reported that all departments of the DS Division received 0% OPI performance bonuses. Thus, the salary freeze of DS Division executives is seen as taking responsibility for the poor performance.
Meanwhile, last year, Samsung Electronics lost its top position in semiconductor supplier revenue to Intel for the first time in two years. According to market research firm Gartner, Samsung Electronics’ semiconductor business revenue decreased by 37.5% to US$39.9 billion last year, while Intel’s revenue fell by 16.7% to US$48.7 billion.