It seems South Korea’s business conglomerates can no longer hide from the effects of the country’s economic turmoil, and in spite of Samsung Electronic Co Ltd’s optimism just a couple of days ago when it announced further investment in Brazil (CI No 3,298), the giant has now announced it will slash investment, move around 30% of its 260,000 employees and cut management salaries. Hyundai Electronics Industries Co Ltd is also showing signs of cracking under the strain, with reports that it may be delaying its รบ3,000m investment in two semiconductor plants in Scotland, although the company has dismissed this speculation, saying it will go ahead as planned with the first phase of the two-phase project. Samsung will focus on its core operations as part of its plan to bolster competitiveness in the face of South Korea’s financial turmoil, and admitted we cannot overcome this national economic crisis without bone-aching pain for survival. The company will cut new investment by 30%, to less than $6,000m, which it will channel into its core businesses of memory and non-memory semiconductors, telecommunications and motor vehicles. It will cut top executives salaries by 10% and halve travel and entertainment costs. Samsung says it will not lay off any staff, although analysts predict a wave of dismissals in other industries, leading to unemployment as a major economic problem. US economists however, said Asia’s woes will dampen, but should not derail, US prosperity.
