Samsung Managers Return A Quarter of Bonuses amid Lowered Earnings
Near to 200 South Korean managers in Samsung have voluntarily returned a quarter of their first-half bonuses. This is to mitigate the loss the company has made in fall of profits and market shares. The thoughtful gesture comes near to the date when Samsung is to post its worst quarterly earnings report in the past two years.
Such an act is not uncommon in Korean culture as the managers are showing that they are taking responsibility for not reaching their sales target. By doing so, there will be a slight boost to Samsung’s reported profit margin. No source has confirmed how much the returned bonuses total to but the estimated amount is reported to exceed 3 billion won ($2.92 million).
The decline in earnings by the company is due to the increased competition felt in the smartphone industry. With Apple becoming more innovative and sophisticated as well as remarkable tech companies such as XiaoMi emerging, the company is struggling to keep up.
Nevertheless, the company is expected to still make a substantial profit for the second quarter of 2014. Samsung reported a profit of 8.49 trillion won ($8.23 billion) in the first quarter. Though it’s an amazing amount, there was a decrease from the 8.78 trillion won that the company experienced last year in the same quarter. In 2013, Samsung had made an earning of 9.53 trillion won (around $8.5 billion) in quarter two but even that fell short of Wall Street’s expectations. For this year’s second quarter, Samsung predicts that it’ll see only 8.49 trillion won and that is still a dip from last year.
We will only know the exact figures for the months of April through to June on July 31st when the report is published.