Samsung Electronics, the leading manufacturer of smartphones, TVs, and memory chips, is reportedly planning to reduce its overseas workforce by up to 30% in certain divisions. This decision comes as the South Korean tech giant faces significant challenges across its business sectors, including a sluggish recovery in its semiconductor division and intense competition in the smartphone market.
Job Cuts Overview
- Scope of Reductions: Samsung has instructed its global subsidiaries to cut sales and marketing staff by approximately 15% and administrative staff by up to 30%. This plan is expected to be implemented by the end of this year and will impact operations across various regions, including Asia, Europe, and Africa
- Impact on India: In India alone, the company may lay off around 1,000 employees from its workforce of approximately 25,000. Reports indicate that severance packages are already being offered to some mid-level employees who have recently left
- China’s Sales Team: Similarly, in China, Samsung has communicated that about 30% of its sales staff could be affected by these layoffs
Reasons Behind the Cuts
The layoffs are part of a broader strategy to improve operational efficiency amid declining profits. Samsung’s semiconductor division has struggled to rebound from an industry downturn that significantly impacted its profitability. Additionally, the company faces fierce competition from rivals like Apple and Huawei in the premium smartphone segment
Market Context
Samsung’s workforce stood at approximately 267,800 at the end of 2023, with over half based overseas. The job cuts reflect a response to a predicted slowdown in global demand for technology products as economic conditions tighten. The company’s stock has also seen a decline, trading at its lowest level in 16 months as analysts adjust profit estimates downward due to weak demand for smartphones and personal computers
Local Implications
In Sri Lanka, where Samsung operates as part of its broader South Asian strategy, these global layoffs may raise concerns about potential job security among local employees. While specific numbers for Sri Lanka have not been disclosed, the ripple effects of such corporate decisions could influence local operations and employee morale.
Samsung has stated that these workforce adjustments are routine measures aimed at enhancing efficiency and will not affect production staff directly. However, the political sensitivity surrounding job cuts in South Korea may complicate similar actions domestically
