Samsung denies job cuts but units plan to trim

Samsung Electro-Mechnics plans to cut 3,500 positions and shed 13 units

By CNN's Alex Frew McMillan in Hong Kong

SEOUL, South Korea -- The Samsung group on Thursday denied it plans to shed 10 percent of its work force by year-end.

But South Korea's largest conglomerate said it may see a reduction in employees as several of its business entities freeze hiring.

Both Samsung Electronics, Korea's largest company by capitalization, and Samsung Electro-Mechanics will also continue to spin off or sell unprofitable business units.

Attrition around 6 percent

The daily Chosun Ilbo newspaper reported Thursday that Samsung will shed 10 percent of its 120,000 employees in Korea in ongoing restructuring, quoting an unnamed Samsung official.

It said the group was focusing its efforts on spinoffs and voluntary resignations.

Choi Seung-jin, a Samsung spokesman, said the group typically loses between 6 percent and 7 percent of its workers through natural attrition.

"We don't have any special plan to cut down the number of employees," Choi said. He added that Samsung expects to replace workers that leave.

But Choi said the group might see headcount drop through spinoff or sales by its affiliates.

The group employed 175,000 worldwide at the end of last year, a third less than when it started restructuring in 1997.

Samsung Electro-Mechanics cutting 3,500 workers

Those efforts to recover from the Asian financial crisis continue.

Samsung Electro-Mechanics announced last month it will shed 3,500 workers this year, leaving it with 10,000 by year-end.

The unit normally sees turnover of around 15 percent a year. The cuts will come by attrition, a spokesman said, as its employees, many of whom are young women, leave voluntarily.

It is also scrapping seven business units and spinning off or selling six others.

Samsung Electronics not filling vacancies

Samsung Electronics, the group's flagship and the world's largest memory-chip maker, sees around 5 percent of its 43,000 workers leave each year. It does not expect to fill those vacancies this year.

Since 1997, it has also spun off or sold around 50 divisions, including its pager and service-center businesses. The company will parse out all its unprofitable units, a spokeswoman said.

The Samsung group displaced Hyundai as South Korea's largest chaebol, or conglomerate, earlier this year. It has trimmed its number of subsidiaries to 40 as of the end of 2000, down from 61.

The 30-biggest chaebol account for 85 percent of South Korea's economy.