Samsung To Freeze Employee Salaries In South Korea

Samsung To Freeze Employee Salaries In South Korea
TechStage Samsung GT-I9305 Galaxy SIII LTE von Telekom Deutschland | BestBoyZ / Flickr CC BY-ND 2.0
Samsung TechStage Samsung To Freeze Employee Salaries In South Korea
Image from Flickr by TechStage

In what is deemed as a cost-cutting move, Samsung Electronics will freeze employee wages in 2015, The Wall Street Journal reported.


First Time Since 2009

The strategy is part of the South Korean company’s efforts to cut costs in the midst of reduced profits. Last July witnessed senior managers within Samsung’s mobile division taking 25% cuts off their first-half bonuses. Regulatory filings have shown that in the third quarter of 2014, mobile CEO J.K. Shin earned only 698 million won, equivalent to $626,000, an amount smaller than the previous quarter’s 1.7 billion won or $1.5 million.

Reuters notes that the wage freeze is the first in 6 years. Global financial crisis forced the company to rely on the same strategy back in 2009. The company employs 93,928 workers in South Korea as of 2013.

This is after Samsung’s head of investor relations Robert Yi hinted early February that the company might cut dividends this year after hiking 40 percent payout and buying back stocks from 2014.

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A company spokeswoman confirmed reports from the media by saying that Samsung executives are already undergoing frozen wages for 2015 as part of these stringent cost-cutting measures.

S6 to Cost $1000?

The wage freeze comes after rumors of pricey Samsung Galaxy S6 surfaced. Forbes reported prices of top-end models of the upcoming Galaxy S6 and S6 edge could cost as much as $1000, an amount that will be applicable to European carriers.

Citing the website Ars Technica, the report states that the 128GB Galaxy S6 Edge, Samsung’s curved model, will cost approximately $1191, and the standard 128GB Galaxy S6, at around $1077.

Respectively, the 32GB and 64GB regular S6 models will be sold for $850 and $964. When taken into consideration with the Value Added Tax, it is estimated that the S6 for US consumers will bear no major differences with the S5 in terms of price.