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Samsung Electronics Maintains Workforce Despite Uncertain Market Conditions
Refraining from Massively Laying off Executives
Samsung Electronics Maintains Workforce Despite Uncertain Market Conditions
  • By Michael Herh
  • April 4, 2019, 09:17
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Samsung Electronics has refrained from massively laying off executives despite growing business environment uncertainties.  

Contrary to earlier expectations, Samsung Electronics Co. has not downsized its pool of executives despite business environment uncertainties this year. Instead of simply reducing the number of executives, a practice it used in the past to respond to weaker business conditions, the company has decided to focus on strengthening its abilities in future key areas, such as semiconductor, artificial intelligence (AI) and 5G, by raising the proportion of executives in the research and development (R&D) workforce.

The total number of Samsung Electronics’ registered and unregistered executives in South Korea stood at 1,039 as of the end of last year, according to the Financial Supervisory Service and related industry sources on April 3. The figure represents a slight decrease from 1,049 a year earlier but it increased by 2 from 1,037 at the third quarter of last year.

This is against earlier market expectations that Samsung Electronics will reduce the number of its executives in order to brace for management uncertainty this year, though it posted record high sales of 243 trillion won (US$214.19 billion) and operating profit of 59 trillion won (US$52.01 billion) last year. Some even said that the company would reduce the number of its executives by up to 10 percent and keep it to less than 1,000 for the first time in eight years after 973 in 2010.

In fact, Samsung Electronics promoted only 158 executives in an annual reshuffle on Dec. 6 last year, down nearly 30 percent from a year earlier, showing a move to prepare for sluggish market conditions this year. However, the company maintained the total number of its executives by adjusting the number of retiring executives in consideration of the number of new executives. In a nutshell, there was no large-scale reduction of executives.

Instead, Samsung Electronics reduced the number of executives in the management support and business units at the headquarters and increased the number of executives in the R&D sector. The company had 383 executives in the local R&D sector until the third quarter of last year but had 51 more executives as of the end of last year after the annual reshuffle.

An official from Samsung Electronics said, “We have had difficulties in semiconductor business from last year as expected but there was no “tighteningyourbelt” type of reduction of executives. Rather, we are managing executives by means of securing super technology gap by securing R&D talent in future key businesses, such as semiconductor, AI and 5G.”