Samsung's workforce shrinks first time in 5 years

SEOUL, SOUTH KOREA: The number of employees at Samsung Electronics has fallen for the first time in five years, the company said on Monday, though it emphasised the reductions were not part of any broader restructuring. Samsung had 1,630 fewer workers as of September 30 compared with the total six months earlier, Samsung spokeswoman Lee Eun-hee said, citing figures reported last week to South Korea’s financial regulator. She emphasised, however, that the work force reduction was natural and not part of a larger restructuring as suggested by South Korean media reports.

“It has nothing to do with downsizing,” she said, adding that those who left did so voluntarily. Samsung Electronics is the world’s biggest manufacturer of memory chips and flat screen TVs and makes a range of consumer electronics, including mobile phones. It is the flagship corporation of Samsung Group, South Korea’s largest conglomerate.

The Suwon, South Korea-based company had 85,269 employees at the end of the third quarter, compared with an all-time high of 86,899 as of March 31, Lee said. Of the 2,379 employees who left the company during the period, 1,447 were classified as office workers, while the remaining 932 worked in manufacturing, she said.

Lee could not provide a breakdown for which of its businesses were most affected by the departures. She said the company added 749 employees during the period. A total of 15 executives also left the company, she said.

The last such reduction was recorded at the end of September 2002, when employee totals fell to 48,364 from six months earlier, according to Lee. Analysts were divided on the significance of the decline in Samsung’s work force. Some downplayed it, with Jay Kim at Hyundai Securities calling it a “natural headcount reduction.” Lee Min-hee, an analyst at Dongbu Securities, however, said it was a sign of broader issues.

“Samsung faces a severe problem in semiconductor business profitability,” Lee said, adding that the company, as well as its competitors, will need to trim workers.