AH Samsung Logo-1

Samsung Freeze Korean Wages For 2015 Following Disappointing 2014

February 26, 2015 - Written By David Steele

It has been widely reported that Samsung are going through a difficult patch and the main reason for this is because the largest part of the business, Samsung Mobile, has struggled in what has become a very competitive market. The Galaxy S4 did not sell as well as hoped and the Galaxy S5 followed suit; Samsung’s devices have struggled against stiff competition from the iPhone now that Apple has discovered larger screen technologies. It has also suffered at the hands of a new generation of Chinese handset manufacturer, such as Xiaomi, who are selling good quality handsets at much cheaper prices into developing smartphone markets. The Chief Executive of Samsung Mobile has retained his job but the latest announcement is that, in Korea at least, Samsung is freezing 2015 salaries for each of its near-100,000 employees. It had earlier reported that executive salaries were to be frozen for 2015 but the last time the business froze wages across the board was back in 2009 following the global financial crisis.

Chang Sea-Jin, a business professor at Korea Advanced Institute of Science and Technology, said this on the matter: “The measures are likely to inject a sense of crisis into employees, who have enjoyed steady wage increases and hefty bonuses in recent years.” A Samsung spokesperson did not elaborate on the underlying reasons for the salary freeze but in recently released figures, Samsung’s Q4 business showed a 60% decline in profits for 2014 compared with 2013. There are other reasons in addition to the relatively poor Galaxy S5 sales, but it is clear that the company are taking significant steps to improve profitability going forwards.

Against this news, Samsung appear to have carefully courted the media regarding the new unannounced Galaxy S6 flagship, which is to be revealed this weekend. We’ve seen numerous official and unofficial teaser announcements and leaks, including a new processor built around the 14nm die size, so it should offer reduced power consumption compared with the competition. The new Exynos processor has already proven it offers comparable performance to the Qualcomm Snapdragon 810 processor. The S6 is also likely to have a bias towards the design and construction of the handset compared with previous models, with Samsung believed to be introducing two flagship handsets constructed out of metal and glass but one offering one (or two) curved glass edges. We’ve also seen the business discuss other plans to boost profits, including reducing the number of models in each line up. All the same, it’s important to remember that behind every new Samsung product, there’s a team of people working hard to bring this to the market.