Electronics maker Samsung has denied reports of plans to cut 10 per cent of jobs at its headquarters, but admitted it would freeze salaries this year.
The salary freeze will be the first since 2009 and although no workers will be made redundant, some will be relocated, the South Korean giant said.
According to the Korea Economic Times, Samsung started downsizing its back-office operations including finance, personnel and public relations and managed to save $1.52bn worth of administrative expenses in the first half by not spending already-planned budget items.
In July this year, the smartphone giant announced disappointing economic results for the second quarter. Facing growing competition from low-cost Chinese makers such as Huawei and Xiaomi, Samsung was forced to admit that sales of its flagship Galaxy S6 line had been “below expectations”.
The operating profit of its IT and mobile unit fell 38 per cent year-on-year to $2.35bn, down 8.4 per cent. It was the seventh straight quarter of falling year-on-year profits.
Its share of the global smartphone market fell 4.3 points to 21.9 per cent in Q2 from a year ago, as worldwide sales rose 13.5 per cent year-on-year, representing the slowest quarterly growth since 2013, according to Gartner.
Samsung isn’t the only handset vendor to struggle as prices fall and competition intensifies. Last month Lenovo announced it will cut 3,200 jobs, around 5 per cent of its total, while HTC said it expects to cut 15 per cent of its staff. HTC also is looking to reduce its operating expenditure by 35 per cent, to get back into the black after several periods of losses.