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Electronics supplier Samsung Electronics is understood to be preparing a major round of redundancies as it struggles to compete effectively in the smartphone market.
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Citing industry sources close to the company, the newspaper said Samsung would target its back-office functions, such as finance, personnel and public relations, through a mix of voluntary retirement or transfers to affiliate companies.
After a run of poor financial results, Samsung is thought to be concerned it will face even tougher times ahead. Additionally, the South Korean government has plans to raise the legal retirement age, meaning many firms are looking to cut back on senior managers.
The cuts come on top of a planned 50% reduction in Samsung’s expenses. This drive has already saved a substantial amount of money in 2015.
In its most recent quarterly filings at the end of July 2015, Samsung reported a net profit of £2.9bn, £500m less than the same period in 2014, with sales in its mobile division down £100m to £1.4bn.
Samsung has been stung by fierce competition from more agile rivals coming out of China – such as Huawei and Xiaomi – which produce cheaper devices with comparable feature sets.
Gartner’s most recent market statistics revealed Samsung’s share of worldwide smartphone shipments dropped from 26.2% in the second quarter of 2014 to 21.9% in the second quarter of 2015.
With the Chinese market showing no signs of a slowdown and the Indian appetite for low-end smartphones reliably expected to explode in the next few months now 4G networks are rolling out across India, Samsung’s problem shows no sign of abating.