By Kim Tae-jong
Samsung Securities Wednesday announced it will reduce the number of its branches from 95 to 72 as part of its restructuring efforts to cope with the prolonged economic slump.
The leading brokerage house’s decision will likely prompt other securities firms to follow suit, as they have also suffered major setbacks in earnings due to sluggish trading amid lingering market uncertainties.
“This is a move to meet diversified customers’ needs and enhance the efficiency of each branch’s different roles,” an official from the firm said.
The company also said the Samsung & Investment (SNI) department, which used to take care of the rich, will be downsized and be integrated into the retail business department.
But it said it will invest what it saves from the restructuring into the development of new channels for sales, as there has been an increase in online trading through the Internet or mobile devices.
Massive layoffs are likely to follow soon.
The firm said it will cut the number of executives from 32 to 26. It is accepting applications for voluntary retirement from workers who have been with the company for more than three years.
The company already cut the number of staffers in July by sending some 100 people to other Samsung affiliates, and dozens of others at the end of last year. The size of the staff dropped from 3,280 in 2011 to 2,772 in 2013.
According to the firm, it posted 38.7 billion won in operating profit in 2013, down 83.71 percent from the previous year.
To cope with the falling profit, it said earlier this month that it would cut its number of branches and employees.
“Amid an unfavorable market environment, the brokerage industry has faced low growth and low profits,” Kim Suk, CEO of the brokerage house, said through an internal announcement. “Online and mobile financial transactions are also expanding, so we need a new business strategy in branch and manpower management.”