There have been reports that up to 1,000 staff may have to depart the India unit. Image courtesy of Reuters
read for four minutes Last updated at 11:35 PM IST on September 11, 2024.
Samsung Electronics, the world’s top maker of smartphones, TVs and memory chips, is reducing up to 30 per cent of its international personnel at key businesses, three sources with direct knowledge of the subject told Reuters.
South Korea-based Samsung has asked subsidiaries globally to slash sales and marketing staff by roughly 15 per cent and the administrative staff by up to 30 per cent, two of the sources said.
The proposal will be implemented by the end of this year and would effect jobs across the Americas, Europe, Asia and Africa, one person said. Six other sources familiar with the situation also verified Samsung’s planned global personnel decrease.
It is not clear how many workers would be let go and which countries and business divisions would be most affected.
The sources declined to be named because the extent and details of the job layoffs remained private.
In a statement, Samsung said staff adjustments done at some overseas facilities were standard, and targeted at enhancing efficiency. It claimed there are no precise targets for the measures, adding that they are not harming its manufacturing staff.
Samsung employs a total of 267,800 workers as of the end of 2023, and more than half, or 147,000 employees, are situated overseas, according to its latest sustainability report.
Manufacturing and development accounted for majority of those employment and sales and marketing staff was approximately 25,100, while 27,800 individuals worked in other areas, the report added.
The “global mandate” on job cuts was delivered approximately three weeks ago, and Samsung’s India division was already awarding severance compensation to certain mid-level staff who had gone in recent weeks, one of the direct sources said.
The source went on to say that there may be up to 1,000 workers who must depart the India division. In India, Samsung has over 25,000 employees.
In China, Samsung has alerted its workforce about the job losses that are expected to effect approximately 30 per cent of its employees at its sales business, a South Korean media said last month.
LARGE DIFFICULTIES
The layoffs coincide with Samsung’s struggles as pressure on its core businesses grows.
Its bread-and-butter chip business has been slower than its rivals in returning from a severe downturn in the industry that reduced its profit to a 15-year low last year.
In May, Samsung replaced the head of its semiconductor group in a bid to solve a “chip crisis” as it seeks to catch up with smaller rival SK Hynix in delivering high-end memory chips used in artificial intelligence chipsets.
In the premium smartphone sector, Samsung is facing intense competition from Apple and China’s Huawei, while it has traditionally lagged behind TSMC in contract chip manufacturing. Additionally, a pay strike in India is causing manufacturing disruptions for Samsung, which generates roughly $12 billion in revenue annually.
One of the persons familiar with the preparations said the job cuts were being undertaken in preparation for a decrease in worldwide demand for technological items as the global economy slows. Another insider said Samsung is aiming to shore up its bottom line by lowering costs.
It was not immediately clear if Samsung will also slash jobs in its headquarters South Korea.
One of the insiders claimed Samsung would find it difficult to lay off staff in South Korea since it was a politically sensitive topic. Conglomerate Samsung Group, of which the electronics giant is the crown jewel, is the country’s top employer and plays a major role in its economy.
Job cuts might also stir worker discontent at home. A South Korean workers’ union at Samsung Electronics recently went on strike for several days, demanding increased wages and benefits.
Shares in Samsung Electronics, South Korea’s most valuable stock, are trading at their lowest level in 16 months on Wednesday, as some analysts slashed their profit predictions for the business recently, citing a poor recovery in demand for smartphones and personal computers.
Samsung plans global job cuts of up to 30% in some divisions: Report | Company News
