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Samsung to freeze employee salaries in South Korea
Samsung Electronics will freeze wages for its South Korean employees this year for the first time in six years, following a year of falling profits, mostly the result of its under-performing mobile division.
Executives at Samsung had already seen their wages frozen for 2015, as a show of responsibility for the company’s first annual decline in profits since 2011, along with cost-cutting measure. The company employees at least 94,000 staff in Korea, as of 2013, who have seen steady wage and bonus increases in recent years.
Samsung is also expected to cut costs further this year, in a bid to improve the company’s profitability if revenues fail to improve in 2015. This is likely at least part of the reason for the recent announcement regarding wages, however, Samsung declined to comment on reasons behind the wage freeze. Earlier this month, Samsung’s head of investor relations, Robert Yi, signalled that the company may also cut dividends in 2015 after it hiked its payout by 40 percent and bought back stocks last year, meaning that investors are also likely to feel another pinch from Samsung’s disappointing 2014 finances.
With the Galaxy S6 launch right around the corner, investors, employees and executives will all be hoping that MWC marks the start of a much better year for Samsung’s mobile division.