Samsung Electronics is looking to reduce costs because of its struggling business
Samsung Electronics finally reported positive earnings in over a year or so. The company was going through a rough patch ever since it launched its flagship product, Galaxy S5. Despite of that, the company could be making significant changes in its work force. According to Korea Times, the smartphone maker is all set to lay off a few jobs in order to reduce the cost of the company. It has set eyes to do that in the coming eyes as the overall business is still struggling. The sources familiar to the matter claimed these speculations.
It is believed that the Galaxy S6 Edge marker is considering bidding farewell to 30 percent of its work force that was employed in the Electronics unit. This is done on the basis of estimates of an unstable business in the upcoming quarters. The company released its earnings in the beginning of this week however apart from the growth in operating profit, the company reported disappointed sales and profits from its Galaxy S6 models during the quarter.
Samsung news reveals that the analysts kept on lowering the bar of expectations and estimates for the company so that it gets easier for the smartphone maker to at least meet the expectation or could report a quarterly gain after so long. But the instability in Samsung’s business made it difficult. However after beating the estimates of the quarterly earnings, the smartphone maker celebrated but failed to realize that the estimated were quite low. Ever since then, most emphasis is on the current issues that the company has to take care of.
According to an official of Samsung, he stated that the company’s priority at this moment is to save costs one way or another. Employees who do not play a vital role will soon be asked to leave the company however will be provided good compensation. The smartphone giant is struggling to compete closely against its arch rival, Apple. The company released the newer Galaxy models to compete against Apple’s new iPhones. Hence now it wants to boost profitability not using its flagship products or by improving and innovating products, but by smaller work force so that the cost is minimized.
The company would not only make changes in its Electronics unit but significant changes are expected to be implemented throughout its business units. Korea Times report, “In memory chips, which it has maintained the leadership for more than two decades, Samsung may be challenged in the near future due to advances by Intel in NAND chips and China’s growing semiconductor business.”