Renault Samsung to lay off 15 percent of its workers image

Renault Samsung, the South Korean subsidiary of French automaker Renault, plans to cut about 15 percent of its workforce under a voluntary retirement program.

The company said on Monday it is trying to cut costs, as falling sales both in South Korea and abroad have affected its finances.

The slowing global economy and Renault Samsung’s limited product line-up are both to blame for the company’s current situation. The automaker denied however media reports about more job cuts and Renault’s transfer of the unit to alliance partner Nissan Motor.

Renault Samsung said about 800 workers out of a total 5,500 will leave the company under its voluntary retirement programs. This is the preferred method to cut personnel costs used by companies operating in South Korea, a country where layoffs are generally strongly disapproved.

Renault Samsung’s sales fell 40.4 percent in the first eight months of this year, with domestic sales dropping 52 percent and foreign sales slumping 32 percent. In 2000, Renault bought a majority stake in the former Samsung Group car-making unit, of which it now holds an 80 percent stake.

Seul-based Joongang Ilbo newspaper last week wrote that Renault-Nissan CEO Carlos Ghosn wants to produce Nissan Rogue vehicles at Renault’s South Korean factory from 2014.