SEOUL/NEW DELHI, Sept 11 (Askume) – Samsung Electronics (005930.KS), the world’s biggest maker of smartphones, TVs and memory chips, is laying off more than 30% of its foreign workforce in some departments, 3 people familiar with the matter told Askume.
South Korea’s Samsung has directed its global subsidiaries to cut sales and marketing staff by about 15% and administrative staff by up to 30%, two sources said.
The plan, which will be implemented by the end of this year, will affect jobs in the Americas, Europe, Asia and Africa, one of the people said. Six other people familiar with the matter also confirmed Samsung’s planned global job cuts.
It’s unclear how many people would be laid off and which countries and business units would be most affected.
The sources declined to be named because the scope and details of the layoffs remain confidential.
Samsung said in a statement that workforce adjustments at some overseas operations are routine and aimed at improving efficiency. The company said the plans were not targeted and would not affect production employees.
According to Samsung’s latest sustainability report, by the end of 2023, the company employed a total of 267,800 employees, of which more than half, or 147,000 employees, were based overseas.
Most of these jobs are concentrated in the manufacturing and development divisions, with about 25,100 sales and marketing employees and 27,800 in other divisions, the report said.
A “global order” on layoffs was issued about three weeks ago and Samsung India has already offered severance packages to some mid-level employees who have left the company in recent weeks, a source close to the deal said.
Sources said the total number of employees leaving the Indian unit could reach 1,000. Samsung has about 25,000 employees in India.
A Korean newspaper reported this month that Samsung had notified its Chinese staff of layoffs, which are expected to affect about 30% of its sales department staff.
Main challenges
The layoffs come at a time when pressure is mounting on Samsung’s key divisions.
Its bread-and-butter chip business has been slower than rivals to recover from the industry’s deep recession, causing its profit last year to fall to its lowest level in 15 years.
In May this year, SamsungIt replaced the head of its semiconductor unit to overcome the “chip crisis” as it faces competition from smaller rival SK Hynix (000660.KS) in the supply of high-end memory chips used in artificial intelligence chipsets.
In the high-end smartphone market, Samsung faces stiff competition from Apple (AAPL.O) and China’s Huawei (HWT.UL) , and it is looking to sign a chip manufacturing contract with TSMC.(2330.TW) is far behind. In India, where Samsung has about $12 billion in annual revenue, a wage strike is hampering production .
A source familiar with the plan said the layoffs were in response to a drop in global demand for technology products due to a slowing global economy. Another source said Samsung was trying to boost profits through cost savings.
It is unclear whether Samsung will also layoff workers at its South Korean headquarters.
One source said Samsung would find it difficult to cut jobs in South Korea as it is a politically sensitive issue. Electronics giant Samsung Group SAGR.UL is South Korea’s biggest employer and plays a key role in the economy .
The layoffs could also fuel discontent among domestic workers. Samsung Electronics Korea’s employee union has been on strike for several days in recent days, demanding a raise in wages and benefits.
Shares of Samsung Electronics, South Korea’s most valuable stock, fell to a 16-month low on Wednesday after some analysts cut their profit forecasts for the company, citing a recent weak recovery in demand for smartphones and personal computers.
