Seoul, South Korea:
South Korea-headquartered Samsung Electronics is planning to lay off up to 30 per cent of its staff in some divisions across its global operations.
According to a Reuters report citing three sources with direct knowledge of the matter, the company has already instructed subsidiaries worldwide to reduce sales and marketing staff by about 15% and the administrative staff by up to 30%.
The report indicated that the plan would be implemented by the end of this year and would impact jobs across the Americas, Europe, Asia, and Africa.
While it is not clear yet how many people would be let go and which countries and business units would be most affected, the inclusion of Africa indicates that the layoffs could also affect Samsung employees in Nigeria.
Meanwhile, Samsung in a statement, said workforce adjustments conducted at some overseas operations were routine, and aimed at improving efficiency. It said there are no specific targets for the plans, adding that they are not impacting its production staff.
Samsung employed a total of 267,800 people as of the end of 2023, and more than half, or 147,000 employees, are based overseas, according to its latest sustainability report.
Manufacturing and development accounted for most of those jobs and sales and marketing staff was around 25,100, while 27,800 people worked in other areas, the report said.
According to one of the direct sources quoted by Reuters, the “global mandate” on job cuts was sent about three weeks ago, and Samsung’s India operation was already offering severance packages to some mid-level employees who have left in recent weeks,
The total employees who may need to leave the India unit could reach 1,000, the person added. Samsung employs some 25,000 people in India.
Earlier this month, a South Korean newspaper reported that Samsung has notified its staff in China about the job cuts that are expected to affect about 30% of its employees at its sales operation.
The job cuts come as Samsung grapples with mounting pressure on its key units. Samsung’s chip business has been slower than its rivals in recovering from a severe downturn in the industry that drove its profit to a 15-year low last year.
In May, Samsung replaced the head of its semiconductor division in a bid to overcome a “chip crisis” as it seeks to catch up with smaller rival SK Hynix in supplying high-end memory chips used in artificial intelligence chipsets.
In the premium smartphone market, Samsung is facing stiff competition from Apple and China’s Huawei, while it has long lagged behind TSMC in contract chip manufacturing.
And in India, which earns Samsung around $12 billion in annual revenue, a strike over wages is disrupting production.
One of the sources familiar with the plans said the job cuts were being made in preparation for a slowdown in global demand for technology products as the global economy slows. Another source said Samsung is seeking to shore up its bottom line by saving costs.
Samsung’s impending jobs cut again highlights the impacts of the global economic challenges, which has several tech giants announced layoffs since last year and which has continued into 2024. In January this year, Microsoft announced plans to lay off 1,900 people across its video-game divisions including at Activision Blizzard, which it recently acquired.
Thereafter, global Grocery-delivery, Instacart, also announced that it was laying off 250 employees across its operations as part of a restructuring.
In February, network equipment maker, Cisco, also said it was to laying off more than 4,000 workers, representing 5% of its 85,000 global workforce.
