In an unexpected plot twist, Samsung has activated “emergency mode” in some divisions in South Korea and has forced all executives in those sections to work six days a week, according to The Korea Economic Daily.
“Considering that performance of our major units, including Samsung Electronics, fell short of expectations in 2023, we are introducing the six-day work week for executives to inject a sense of crisis and make all-out efforts to overcome it,” a Samsung executive said, as reported by the outlet.
Samsung made the radical decision to increase executives' work weeks in response to the sharp depreciation of the South Korean won, rising oil prices, and increasing borrowing costs, which have triggered business uncertainties for the South Korean brand.
Only Executives Will Be Expected to Work Overtime, Company Says
For now, only Samsung’s top management of some of its Korean divisions, including Samsung Display Do., Samsung Electro-Mechanics Co., and Samsung SDS Co., are mandated to work six-day weeks immediately. Senior managers at Samsung Life Insurance Co. and other divisions are expected to follow suit soon.
While this model may seem unusual in other parts of the world, it’s a common practice in South Korea to deal with “emergency” situations when companies haven’t performed well. In fact, although the measure is now official and mandatory, Samsung’s executives have been working six days a week on a voluntary basis since January.
This “emergency” measure is limited to the managers and heads of the divisions mentioned above. The rest of Samsung employees will continue to work their regular five-day, 40-hour work week as usual.
Samsung has limited the six-day week measure to top management because the company expects its executives to develop new commercial strategies to adapt to the changing business market marked by geopolitical risks. This includes the ongoing Russia-Ukraine conflict and rising tensions in the Middle East.
Samsung's electronics division had a difficult year, with operating losses of 15 trillion won ($11 billion) in its core semiconductor business in 2023, which accounts for approximately 80% of the company’s total earnings.
Despite the negative financial results, the brand has signaled the end of the semiconductor downturn with a 10-fold increase in operating profit in the first quarter of 2024, despite facing tough competition from SK Hynix.
Additionally, Samsung has regained part of its smartphone market share, with a 7.8% growth in sales. The brand is also in the process of finalizing agreements with NVIDIA to integrate Samsung’s memory chips into its products.
Image | Samsung
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