Samsung suspends staff overseas training to cut costs

Samsung Group canceled overseas training for South Korean staff for the first time in 32 years as the country’s top conglomerate tried to cut costs amid growing external uncertainties such as rising interest rates and weakening demand.

The group decided to suspend the program to train employees as local specialists in overseas markets until 2023 at least, according to sources of the group and industry on Wednesday.

Samsung Electronics Co., the world’s largest memory chip and smartphone maker, and its affiliates have notified some 120 employees selected for the training of its cancelation. They were selected in 2020 but the program was postponed due to COVID-19.

Samsung Human Resource Development Center said COVID-19 posed a threat to staff safety and cancel the program, but industry sources said the group made the decision to reduce costs, given the dwindling pandemic.

A participant receives more than 100 million won ($77,340) a year in addition to his/her annual salary.

Samsung Electronics already took steps to drastically cut costs while maintaining investments in future growth.

PROGRAM FOR GLOBAL SAMSUNG

The late Samsung Group Chairman Lee Kun-hee in 1990 introduced the program that supports staff with employed for more than three years to study languages and cultures of other countries for one to two years.

Lee pushed ahead with the program, saying “we cannot do anything without globalized manpower,” although he faced strong internal opposition because the training cost much and removed talented staff from the fields.

Samsung has sent a total of some 7,000 employees to about 90 countries to train them as local specialists by 2019. The group had focused on developed countries by 1997 but expanded the areas to emerging markets such as China, Russia and India since then.

The local specialists have been responsible for building up human networks in each country to expand global markets.

The suspension raised concerns within the group over shrinking investments in human resources and weakening industrial competitiveness.

Write to Ji-Eun Jeong at jeong@hankyung.com
Jongwoo Cheon edited this article.