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Wednesday, 13 August 2014

Samsung pursues spending cuts in wake of earnings upset


Early this summer, rumors were already circulating that Samsung, despite the release of high-profile phones like the Galaxy S5, wasn’t shaping up to report big earnings, and indeed, when the numbers finally came out late last month, we saw the lowest quarterly profit in a long while. Granted, it’s still bringing in billions, but that sort of slow-down is nonetheless troubling to a company that’s been enjoying the sort of unchecked momentum that Samsung has. Now it looks like the manufacturer is taking steps to turn things around, as we get word of new cost-cutting measures.
If you were Samsung and you were looking to save some money, where would you make cuts? Maybe scale back your massive advertising expenditures? Save on development and support costs by streamlining your handset selection to just a few key models? According to reports, though, the focus right now is on operating expenses, and specifically cutting down on travel costs. While the company is admittedly spending tens of millions a year on things like executive airfare, we’re just not sure that’s going to make any impact when hundreds of millions are on the line.
If anything, these efforts might be attempts by Samsung execs to keep themselves off the chopping block; right now there’s no formal word of layoffs, but rumors suggest that restructuring could be in the works. Other incidents, like many execs voluntarily returning incentive pay, also seem to reflect that same attitude.
For the moment, at least, none of this threatens to have much of an impact on Samsung’s efforts to keep delivering new phones.
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