By Kim Yoo-chul
Samsung Group is increasing its reduction of managerial-level workers and executives as it seeks to become leaner and reduce costs amid an uncertain market outlook, officials said Tuesday.
"Samsung's top priority is to save costs. Average workers with mediocre performance are being advised to leave the company with a sizable compensation," one official said.
He said the ongoing efforts to downsize the workforce corresponds to a plan to layoff workers in countries that Samsung runs manufacturing plants in.
Another official, who asked not to be identified, said human resources officials at Samsung units were meeting with employees to persuade them to join the "voluntary retirement system."
The key point is how many Samsung Electronics' workers will be let go as the electronics titan provides the biggest revenue for the group and its human resources management plan will act as a guideline to other group affiliates.
Industry watchers said Samsung Electronics is expected to relocate up to 30 percent of its workers as it cuts back on the role of those who work in finance, human resources and marketing.
Samsung is increasingly being challenged in its smartphone business due to the rise of cheap Chinese vendors. In memory chips, which it has maintained the leadership for more than two decades, Samsung may be challenged in the near future due to advances by Intel in NAND chips and China's growing semiconductor business.
Samsung Electronics said it had no comment about its layoff plans.
"Underperformers and managers aged over 50 and officials who failed to be promoted to a higher level are the targets for the voluntary retirement program by Samsung C&T," said the official.
Samsung Heavy Industries, the shipbuilding unit of Samsung, has been accepting letters of retirement from employees at all divisions hit by the prolonged downturn in the shipbuilding industry. It is expected to report more than 1 trillion won in operating losses this year.
Samsung SDI, the battery making affiliate, is expected to follow similar steps after an internal check-up is finalized.
Samsung Electro-Mechanics, the component affiliate, plans to cut the number of its staff for greater flexibility in human resources management.
Samsung Group will announce its year-end reshuffle of top and middle level executives in the first week of December. It is expected that many division heads will be replaced by younger people as a power shift is underway inside the conglomerate led by Samsung Vice Chairman Lee Jae-yong.