Business

Samsung will cut bonuses for mobile division employees

The Galaxy Note 7 could have done wonders for Samsung’s fortunes but it has ended up costing the company billions of dollars. While heads are yet to roll at the company’s mobile division, Samsung has reportedly decided to cut bonuses for its mobile division employees. Since bonuses are tied to the division’s annual profits and the Galaxy Note 7 has taken a substantial chunk out of them, the employee bonuses will be impacted in a similar fashion.

Samsung’s OPI reward program for employees pays up to 50 percent of their annual salaries as bonuses as long as they fall within 20 percent of the company’s excess profits. Samsung is due to dish out OPI incentives on January 26, 2017. According to local media reports from South Korea, the bonus percentage for the mobile division employees has been reduced from 50 percent to just 17 percent. The cut has primarily been made due to the Galaxy Note 7 recall.

Employees of the company’s mobile division have enjoyed receiving bonuses at the maximum rate of 50 percent for the past few years due to strong smartphone sales. This is the first time in almost six years that the bonus percentage has fallen below 20 percent. On the other hand, employees of Samsung’s memory division are expected to receive 50 percent of their salaries as bonuses.

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