South Korean tech giant Samsung Electronics said Thursday it will in 2015 freeze wages of all its workers in South Korea for the first time in six years, after the world’s biggest smartphone maker suffered a fall in profits due to rising competition.
Samsung Electronics has been involved in cost-cutting moves after the company last month posted its first yearly net income fall since 2011, as its market share was stolen by Apple Inc’s new iPhones and low cost Chinese competitors like Xiaomi Inc.
No reasons were provided by a Samsung spokesman for the wage freeze. The recent wage freeze is on its way before the company’s highly anticipated next Galaxy S smartphone at a March 1 event which is expected to revive sales growth momentum. The last time it happened in 2009 in the wake of the global financial crisis.
Samsung Electronics had already wages for executives in this year in an effort to belt-tightening measures.
“The measures are likely to inject a sense of crisis into employees, who have enjoyed steady wage increases and hefty bonuses in recent years,” said Chang Sea-Jin, a business professor at Korea Advanced Institute of Science and Technology and author of the book “Sony vs Samsung”.
By the end of 2013, Samsung Electronics had 93,928 in its staff. Samsung’s head of investor relations, Robert Yi, provided signs earlier in February that the firm is expected to reduce dividends in 2015 after it raised its distribution by 40 percent and bought back stocks last year.
Separately, Google is facing an increasingly hostile regulatory environment in Europe. Therefore, the search engine giant is going forward to restructure its European operations with the appointment of a single executive at its head, the Financial Times reports.
Prior to this announcement, Google was successfully split in two in Europe. The division was made as one for Northern and Central Europe, and another for Southern and Eastern Europe. They are now going to be combined, and will work under the control of Google executive Matt Brittin, who previously was in charge of the Northern and Central European operation.
