Samsung to Conduct Early Retirement
By Cho Jin-seo
Staff Reporter
Hundreds of mid-level managers are said to quit Samsung Electronics this year in its early retirement program as the firm tries to revamp sluggish operations.
The company said as many as 200 employees may apply for the voluntary early retirement program this year. The company denied any major workout plans, though there can be minor restructuring and relocation in some departments.
``The number can swell since some departments which are being relocated from Seoul to Suwon this year,'' a company spokesperson said. ``Every year around 100 to 150 employees quit the company in that way. We do not know how many it would be this year but it won't be an extraordinary number.''
Samsung Electronics has continuously increased its workforce this decade while its business keeps prospering in and out of Korea. The number of employees has grown to 85,000 at the end of last year, from 46,000 five years ago.
The early retirement plan was adopted by Samsung and many other Korean conglomerates amid the Asian financial crisis for aged workers. Before then, lifetime employment was considered natural in big companies as the economy had enjoyed three decades of rapid growth.
In many cases, a company pays a year's salary in compensation for outgoing managers. But the amount varies case by case, the Samsung spokesman said. Junior level employees are not eligible for such options.
Restructuring has been a main issue at the electronics giant this year after Chairman Lee Kun-hee warned that the firm may face a big crisis in five years. Samsung Electronics is Korea's largest and most profitable company, but it is expected to report its lowest quarterly profit in four years today after a supply glut drove prices of computer memory chips to record lows.
Lee has already reshuffled the top management at Samsung Electronics earlier this year. Since then, newly appointed chief executives such as Choi Gee-sung of the Telecommunication Network division and Park Jong-woo of the Digital Media division have been reorganizing their teams.
As part of such efforts, some of Samsung's backup offices scattered around Seoul have been consolidated in the firm's Suwon R& D complex, about 30 kilometers south of Seoul.