Samsung is freezing its employee wages for the first time since the Great Recession, according to a Reuters article. It’s widely seen as a cost-cutting move in the wake of recent struggles the company has faced, particularly in the mobile sector.
While a spokesperson for the company declined to explain the rationale for the move, the writing is on the wall. A flood of competition into the smartphone market compelled Samsung to take measures to cut production costs last fall, and also prompted it to cut the number of smartphone models it would be releasing for this year. And its biggest rival, Apple, made some significant inroads into its marketshare on its home turf in South Korea.
As a result, the company has been struggling to diversify its business endeavours outside of the mobile market, seeking to launch its own mobile payment service and exploring the possibilities of the Internet of Things with products like its smart TV. But even those forays have brought about problems: The mobile payment platform could bring it into competition with its longtime strategic partner Google, while the US Federal Trade Commission is investigating its smart TV over privacy concerns related to its voice recognition technology.
The silver lining is that Samsung has a shot at reclaiming some ground with the newly announced Galaxy S6 smartphone. The new device was unveiled at Mobile World Congress in Barcelona and has a screen folding across three of its sides, which could prove innovative enough to reignite consumer interest.