By NNN-TNA
Seoul : Samsung Electronics Co., South Korea’s leading electronics giant, has cut thousands of jobs for the first time since 2002 amid a decline in memory chip and flat-panel prices, industry sources and data showed Sunday.
The corporate restructuring comes as Samsung, the world’s biggest memory chip producer, is struggling with falling prices for its main products sparked by industry-wide oversupply.
According to data reported by Samsung Electronics to the Financial Supervisory Service on Sunday, the number of its workers stood at 85,269 at the end of September, down 1,630 from the 86,899 reported six months earlier. The number of executive-level officials also declined by 15 over the same period.
The decline is the first of its kind for Samsung Electronics since 2002.
Samsung Electronics is the main unit of the nation’s largest conglomerate, Samsung Group, and is frequently cited as the most attractive company for first-time job seekers. Its business portfolio ranges from computer memory chips to digital home appliances, mobile handsets and flat panels.
Market observers had expected such large-scale corporate restructuring since earlier this year when Samsung reported worse-than-expected earnings in the first quarter.
Samsung said that its sales grew a mere 3 percent in the first quarter from a year earlier and operating profit plunged 27 percent over the same period. The worst performance in four years was attributed to anemic performances in its key business areas, including semiconductors and flat-panel screens, hit by sharply declining product prices.
It prompted rumors that Samsung would soon launch a corporate restructuring drive, including a workforce reduction, and led the company to say in July that it will accept voluntary retirement by executives.
Shares of Samsung Electronics, which peaked at 687,000 won (US$748.85) in July, have fallen nearly 20 percent over the past few months, closing at 557,000 won on Friday.
Among other things, the semiconductor sector slump acts as a serious drag on Samsung Electronics. According to industry data, prices of DRAMs plunged more than 50 percent during the third quarter from a year earlier and those of NAND memory products fell some 40 percent over the same period.
Analysts say that such sluggish market conditions for Samsung are likely to remain for the time being since global competition shows little sign of abating.