Samsung Engineering Co., one of South Korea's leading builders, plans to cut 700 workers by the end of 2015, company and industry sources said Thursday, in line with a groupwide move to slash costs amid lackluster returns.
The company said in its investor relations report that it plans to streamline its workers to 7,550, about an 8.4 percent drop from the current 8,255 workforce, by the end of this year.
"The layoff is only a part of routine efforts to make manpower management more efficient," a Samsung Engineering official said.
Industry watchers, however, see the move as reflecting the prolonged economic slump weighing down on the company, which just managed to turn around from an operating loss last year.
Samsung Engineering posted an operating profit of 161.8 billion won ($147 million) in 2014, a significant turn from the operating loss of 1.02 trillion won a year earlier.
Analysts said investors should take a wait-and-see stance on the industry's recovery due to uncertainties in overseas markets.
Following the uneasy business environment, around 60 executives returned their February wages back to the company.
Earlier this year, Samsung Group's spokesman said each affiliate will conduct workforce reshuffles "based on the judgments of each company" and not on orders from the headquarters.
There are also speculations that Samsung C&T Corp., a construction and trade arm of Samsung Group, is mulling a voluntary retirement program that may affect hundreds or even thousands of workers, although the company said nothing has been decided on the plan.
The belt-tightening has been underway at other Samsung companies as well. Samsung Electronics Co., whose number of workers increased 3.7 percent on-year in 2014, paid 9.3 trillion won in wages to its employees in 2014, down 0.3 percent from a year earlier.
The tech giant also reduced its spending on advertisements last year, allocating 734.8 billion won, down 26.1 percent from 994.3 billion won spent a year earlier, separate data compiled by market tracker Chaebul.com showed.
Samsung Electronics also decided to freeze the pay of its employees for 2015, the first such move since 2009. (Yonhap)