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The effects of the global economic recession is beginning to take definite shape in Korea. The president and owner of the Samsung Group, Lee Kun-Hee, recently ordered the CEO's of his empire to implement 'constant restructuring', to which the CEO's answered with promises of mass lay-offs totalling to 10,000.

Samsung announces plans for mass lay-offs

The two cash-cows of Samsung Group, Samsung Electronics and Samsung Life Insurance, announced that they will cut 1,000 and 1,050 jobs respectively. Samsung Electronics had already laid-off 2,000 workers last year, while Samsung Life Insurance decreased its workforce by the thousands targeting mainly part-time women workers. The plans for the restructuring comes after consultation from McKinsey & Co. which advised Samsung Life Insurance to reduce costs, restructure its organization, reform its market channels and products. The management stated that 400 workers will be 'offered' with opportunities for 'voluntary' retirement, while the rest will be cut through spin-offs, transfers to other Samsung companies, reduction of branches and offices. It plans to shut down 10 of its 100 branches and 90 of its 1,420 offices nationwide.

Samsung's Gender 'Selection'

Announcing their plans for the lay-offs, Samsung did not hesitate to explicitly state that their plans for job reductions this year again includes 'selective' firing, strengthening male salesmen into 'financial planners', while cutting down on women who they consider are either married and pregnant thus unsuitable for the job, or just not professional enough. With the ballooning of the insurance market, of which Samsung Life Insurance holds 40%, Samsung had hired thousands of women as contract saleswomen. The women who had not much other choice, willingly took up the jobs despite the fact that they were highly unstable and low-paying, prone to pressures to keep up a certain level of sales lest they get fired for low performance. However, as soon as prospects in the finance industry darkened, these women were first to go - out of the 1,723 fired during the last couple of years, around 1,200 were women.
As a result of restructuring and job cuts in 1998, Samsung Group as a whole recorded a net profit of 8.5 trillion won (6.64 billion US$).

Counteraction to yet another round of recession?

Samsung is finding its justification for the lay-offs in the recent situation of the world economy. The economy in the whole of East Asia has been hard hit by the recent recession especially in the IT industry - falling interest rates, fluctuating foreign exchange, drop in chip prices, and foremost as a reaction to the shadows that loom over the US economy. As well as many local ones, multinational companies are also in the midst of implementing mass lay-offs, the recent ones being Japan's Toshiba recently planning to fire 17,000 totalling 25,500 in the past two years, Hitachi 14,000 and NEC 4,000 workers, while the US telecom giant Lucent Technology plans to cut 17,000 jobs.
The forecasts from economists in Korea are somewhat gloomy, with talk of a second wave of economic crisis which could be even worse than the one that hit in 1997, resulting in devastation for many, with unprecedented level of lay-offs and unemployment. With the delusion that restructuring is the 'cure' for the volcanic global economy, the recent mass lay-offs can only worsen the instability, on a worldwide scale.
The dream of never-ending accumulation labelled by the proponents of global capitalism as a 'New Economy' is turning out to be mere bubbles, based on speculative capital bloated beyond capacity and precariously sustained. But the turnout of this bubble economy is very much a reality for the tens of thousands of workers who are losing their jobs overnight.