Samsung Implements Emergency Management with Six-Day Work Week Amidst Business Uncertainty

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Submitted2024.04.17 18:32
Edit2024.04.17 19:19
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Samsung enters ’emergency management’
Each senior officer works 6 days a week

A positive response to regulatory uncertainty
Whether it will spread to other companies remains to be seen.

Samsung Electronics Seocho headquarters building. Photo = Reporter Kim Beom-jun Executives of Samsung Group affiliates will begin working six days a week as early as this week. In a situation where the performance of major affiliates such as Samsung Electronics was not as good as before, and uncertainty in the business environment such as exchange rates and rising oil prices, the company almost entered a ‘crisis management system’. As other companies are facing similar concerns, there is a study that there is a great chance that the ‘active six-day working week’ will spread throughout the business world.

According to the industry on the 17th, executives at all Samsung affiliates will begin working six days a week as early as this week. This is because the human resources teams of each Samsung affiliate have recently recommended that executives participate in the six-day workweek system. A senior executive at a Samsung subsidiary said, “Considering that the performance of key partners, including Samsung Electronics, is falling below expectations, we are implementing this to encourage executives to alert and participate in overcoming the crisis, “As the conflict between Iran and Israel increases, the exchange rate rises. Samsung Electronics has decided to include other executives in production and sales as well in the six-day work week, which is mostly implemented by executives in charge of management support and development. Executives from electronics companies such as Samsung Display, Samsung Electro-Mechanics, Samsung SDI, and Samsung SDS decided to implement it as early as this week. Officials from the three engineering, procurement and construction (EPC) companies, including Samsung C&T, Samsung Heavy Industries, and Samsung Engineering, have been working six days a week since the beginning of this year. It is reported that financial affiliates such as Samsung Life Insurance will soon enter the six-day working week system.

The six-day work week is reported to be one in which each executive chooses to work either Saturday or Sunday.

The industry expects ‘crisis management’ to spread throughout the business world. SK Group, suffering from the poor performance of its major affiliates, also revived the ‘Saturday Presidents’ Meeting’ in February, where senior executives and CEOs of major affiliates gather on Saturdays to discuss cases to come for the first time in 20 years.

Performance has declined due to a triple problem… Companies that turn on their emergency lights
Samsung Semiconductor posted a surplus in the first quarter … Foundry industry still in deficit

“It’s really an emergency management declaration. “

This is the industry’s assessment of Samsung Group’s ‘implementation of a six-day week for executives’. The reason why Samsung went into crisis management was because it believed that the business environment was not easy. Samsung Electronics’ business performance has deteriorated to the point that it recorded an operating loss of 15 trillion won last year in its core business, semiconductors. External variables are also unusual. As the war between Russia and Ukraine and the conflict between Iran and Israel spread, the volatility of exchange rates and oil prices, which are key regulatory variables, is increasing. There is an analysis in the industry that there is a great possibility that the crisis management started by Samsung will spread to other large corporations.

○ Crisis halts Samsung Group

Samsung’s implementation of the ‘active six-day work week’ had a significant impact on the performance of Samsung Electronics. The Device Solutions (DS) division, which oversees Samsung Electronics’ semiconductor business, recorded operating losses for four consecutive quarters last year, recording an operating loss of 15 trillion won. Although the DS sector had succeeded in turning a profit in the first quarter of this year, the semiconductor business of the system, including the foundry (production of loads of semiconductors), which is encouraged intensively as a future business, still in deficit. The pursuit of competitors is also unusual. SK Hynix leads the high bandwidth memory (HBM) market, which leads the artificial intelligence (AI) semiconductor market. Intel, which announced that it entered the furnace, has presented a plan to surpass Samsung and rise to second place.

The external environment, which directly affects corporate governance, is also worsening. This is because geopolitical risks are increasing as the war between Israel and Iran follows the war in Ukraine. As a result, oil prices and exchange rates fluctuate. In the foreign exchange market, the yen-dollar exchange rate once rose to a level of 155 yen per dollar. The weakening of the winner is also bad. The dollar won exchange rate was also higher than 1,400 won per dollar during the day. The shock waves of prolonged high interest rates on the global economy continue. A representative example is the recent statement by Jerome Powell, Chairman of the US Federal Reserve System, that an interest rate cut may be delayed.

○ Expansion of crisis management to all businesses

Business circles are talking about the possibility that Samsung’s crisis management declaration will spread throughout the business world. This is because business conditions in key industries are worsening. SK Group, the second largest business conglomerate, revived the ‘Saturday Meeting of Presidents’ for the first time in 20 years, where senior executives and CEOs of major partners gather on Saturdays to discuss on upcoming issues. In addition, officials from Supex Pursuit Council (Supex), the top corporate consultancy of SK Group, decided to return the flexible work system that allows them to rest on two Fridays every month. It is known that this reflects the intention of Supex Chairman Choi Chang-won that executives should step up and create a ‘work atmosphere’ to control the loose atmosphere of the group. The petrochemical industry is undergoing large-scale workforce restructuring. LG Chem, Korea’s No. 1 company, recently decided to accept applications for voluntary retirement before the 30th from production technicians in its advanced materials business division who have worked for more than five years. LG Chem decided to sell the IT film business facilities (polarizer and polarizer material) to a Chinese company for about 1.1 trillion won last September to liquidate low-profit margin businesses and invest in businesses new such as secondary battery cathode materials to expand. . After that, in the second half of last year, the employees of the IT products department who were in charge of the business were transferred to other departments and a special voluntary retirement was also done.

Lotte Chemical is also in the process of relocating its employees. It was decided to transfer some of the workers of the Ulsan plant, which produces PET, plastic raw material, to other plants. The analysis is that this is a measure to control the supply of PET as a result of the ‘rush for expansion’ by Chinese petrochemical companies.

Reporter Hwang Jeong-soo/Kim Woo-seop [email protected]