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4-Traders Homepage  >  Equities  >  KOREA EXCHANGE  >  Samsung Engineering Co Ltd    028050   KR7028050003

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Samsung Group records more than 5,000 layoffs in one year

11/19/2015 | 04:38am US/Eastern

Seoul, Nov 19 (EFE).- Samsung Group cut 5,354 jobs in one year to reduce costs in its restructuring process, said the South Korean Financial Supervisory Service, or FSS, Thursday.

According to a report published by FSS, the 13 main subsidiaries that make up the largest South Korean conglomerate, registered a total of 212,331 employees in September, whereas exactly 12 months earlier the figure was 217,685.

The group's main company Samsung Electronics had 98,577 employees on its payroll till the end of September, 999 less than in the same month last year, while Samsung Display suffered an even greater cut with 1,339 workers laid off in the same period, leaving the total number at 25,599.

Samsung Engineering, one of the subsidiaries, which recorded losses in the third quarter, had 700 employees less on its September payrolls, while Samsung Electro-Mechanics and Samsung SDI cut 814 and 687 jobs respectively over the same period.

The only arms of the company that increased their employee count were Samsung Heavy Industries shipyard with 167 new jobs and Samsung Fire and Marine Insurance with 129 new jobs.

South Korean experts attribute the cuts to a drop in Samsung's profits and sales owing to a prolonged global economic crisis and increased competition, among other factors.

Samsung Electronics, since 2014, has witnessed a steady decline in profits over increased competitiveness in the smart devices market with Apple dominating the high end and Chinese manufacturers monopolizing the medium and lower segments.

Analysts also blame the current restructuring process that involves a merger between Cheil Industries and Samsung C & T to form Samsung Group's new holding company, thus guaranteeing control of the powerful Lee family who own Samsung.

The restructuring process was accelerated by the serious health condition of Samsung president Lee Kun-hee, 73, who has been in hospital since May 2014 after a serious heart attack.

The business empire is now headed by his only son Lee Jae-yong, 47.

Although the Samsung Group is known worldwide for its electronics business, it covers a wide range of other sectors, including heavy industry, shipyards, chemical products, medical, tourism, entertainment and financial services, representing more than 20 per cent of the South Korean GDP. EFE


(c) 2015 EFE News Services (U.S.) Inc., source EFE Ingles

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