Samsung Electronics laid off one-third of its workforce, or about thirty
thousand people, replaced half of its senior managers, and sold off $2
billion in non-core businesses, including an executive jet and an entire
semiconductor division. Senior managers took a 10 percent pay cut.
“Workers can no longer count on such perks as preschool tuition,”
Fortune reported. “At headquarters, the thermostat is now set so low that
execs wear thermal underwear.”
In the most devastating act to loyal Samsung employees, South Koreans
abandoned the expectation of lifetime employment, driving a dagger into
the tradition of filial piety.
The chairman had been preaching crisis with little success until now.
Having slashed Samsung’s bureaucracy, the chairman’s empire was
emerging nimbler, ready to focus on the businesses that mattered: mobile
phones, televisions, LCD displays, lithium ion batteries for cellphones, and
NAND flash memories—Samsung’s last investment, which later made
advances in the iPod possible.
“Think about it this way,” the chairman’s aide Hwang Young-key told
me. “The Frankfurt Declaration, in 1993, was when the chairman laid down
his vision. But the Asian financial crisis was his chance to execute it.”