SEOUL, Korea-Responding to the recent turmoil in Korea’s economy, Samsung Group said it will reorganize management-making cuts in all Korea-based business units-refocus investments on core growth businesses and cut costs across the board.
In an effort to bolster the Korea-based conglomerate’s competitiveness, Samsung said it will scale down overall investment by at least 30 percent in 1998. Samsung divested 35 product lines in 1997 and will divest an additional 34 in 1998.
The company plans to focus investment on core growth businesses including semiconductors, telecommunications, automobiles and retail services.
Restructuring efforts will be focused on the company’s domestic operations. Each Korean business unit will be required to eliminate a layer from the current decision making process during 1998, as part of a “speed management” initiative.
The salaries of all Korea-based executives will be reduced by 10 percent during the next year.
Breaking from traditional Korean business practices, Samsung said it plans to implement a new policy to base all salary increases on merit rather than seniority.
“Samsung Group played a historical role in Korea’s economic miracle over the past few decades,” a company representative said.
“Now the world is watching to see how top conglomerates will lead Korea’s economy back to health and prosperity.”
