Samsung Electronics is reportedly cutting up to 30% of its overseas employees in some departments,
three people familiar with the matter said
.
Samsung has instructed its global subsidiaries to cut about 15% of their sales and marketing staff and up to 30% of their administrative staff, two of the sources said. The plan, which will be implemented by the end of the 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 global layoffs plan.
Samsung said in a statement that staff adjustments at some overseas business units were routine and aimed at improving efficiency. The company said the plans had no specific targets, adding that they would not affect production staff.
Samsung's report said that by the end of 2023, Samsung will have a total of 267,800 employees, of which more than half (147,000) will be overseas employees. Manufacturing and development account for the majority of these jobs, with sales and marketing staff accounting for about 25,100 and other areas accounting for 27,800 employees, the report said.
Samsung's layoffs come at a time when the company is facing major challenges. Its main chip business has recovered more slowly than rivals due to the industry recession, with profits falling to a 15-year low last year. In May, Samsung replaced the head of its semiconductor division in an effort to overcome a "chip crisis" and catch up with smaller rival SK Hynix while supplying high-end memory chips for artificial intelligence chipsets.
Samsung faces stiff competition from Apple and Chinese brands in the high-end smartphone market, and has long lagged behind Taiwan Semiconductor Manufacturing Co. in chip manufacturing. In India, where Samsung generates about $12 billion in revenue a year, a strike over wages is disrupting production.
A source with direct knowledge of the matter said the "global directive" to cut jobs was given about three weeks ago and Samsung India has offered severance packages to some mid-level employees who left in recent weeks.
The total number of employees who may need to leave India could reach 1,000, the person added. Samsung employs about 25,000 people in India.
Earlier reports also confirmed the news of layoffs at Samsung India.
Samsung Electronics will lay off more than 200 executives from various divisions of its India business as
it seeks to cut costs and boost profits, as weak consumer demand hits its sales, Samsung loses market share in its cash cow smartphone business and several industry executives said.
The layoffs will occur in mobile phones, consumer electronics, home appliances and support divisions. This will account for about 9%-10% of its total management team of more than 2,000 executives.
Samsung India has also frozen new hiring, while executives who voluntarily resign will no longer be hired, which may also reduce the number of employees leaving. The fired employees will receive three months' salary as per their employment contract and one month's severance pay for every year they have worked in the company.
Samsung Electronics workers at its Chennai plant went on a third day of an "indefinite" strike, affecting production of TVs, refrigerators and washing machines ahead of the crucial holiday season. The company is still struggling to run the plant at about 50% to 80% capacity.
In addition, news of layoffs in the Chinese market has also been reported in recent days. Sources said that Samsung Electronics will lay off 30% of its employees in the Chinese sales department.
Samsung Electronics has chosen extreme restructuring measures in response to the intensified competition in the Chinese market, which has made its business prospects uncertain. According to industry sources, Samsung has recently issued a restructuring notice to employees in its Chinese sales department and started accepting employee resignation applications. The first wave of layoffs is expected to reduce 130 people, accounting for about 8% of the total 1,600 employees in the Chinese sales department.
Samsung executives said the restructuring was not an end but a beginning, and revealed that the company plans to reduce the number of employees in its Chinese sales department by about 30% by 2025.
In response to the news that it plans to lay off 8% of its employees in the Chinese sales department, Samsung Electronics China responded to Jiemian News that in order to improve the company's organizational efficiency and market competitiveness, the company will make necessary business adjustments and personnel optimization. By cutting some highly repetitive jobs and positions, the company's resources can be better allocated and organizational efficiency can be improved.
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