Three knowledgeable sources revealed to Reuters on Wednesday (September 11) that Samsung Electronics, the world’s largest manufacturer of smartphones, televisions, and storage chips, plans to globally cut jobs by the end of the year, with some overseas business divisions facing cuts of up to 30%. However, details such as the specific number of job cuts, countries affected, and business divisions involved remain unclear.
Two sources stated that Samsung Electronics has instructed its global subsidiaries to reduce sales and marketing personnel by approximately 15% and administrative staff by up to 30%.
One source mentioned that this plan is set to be implemented by the end of this year and will impact positions in the Americas, Europe, Asia, and Africa.
According to Samsung’s latest sustainability report, as of the end of 2023, Samsung had a total of 267,800 employees, with over half (147,000) stationed overseas. Sales and marketing personnel affected by the job cuts are estimated at around 251,000.
A source with direct knowledge stated that the “global directive” for job cuts was issued approximately three weeks ago. Samsung India may see job cuts that could reach up to 1000 employees, with severance pay offered to some mid-level employees who have resigned in recent weeks.
It is currently unclear whether Samsung will conduct job cuts at its headquarters in South Korea.
A source pointed out that conducting job cuts in South Korea could prove challenging due to the political sensitivity involved. Samsung Electronics is the largest employer in South Korea and plays a significant role in the country’s economy. Job cuts could potentially lead to dissatisfaction and unrest among domestic labor. Recently, Samsung Electronics’ South Korean labor union held a several-day strike demanding higher wages and benefits.
Regarding the Chinese market, Samsung Electronics has officially confirmed the job cuts.
In response to a journalist from China’s “The Paper” on September 4, Samsung Electronics stated that in order to enhance the company’s organizational efficiency and market competitiveness, they will be cutting some redundant jobs and positions.
As reported by South Korean media “Seoul Economic Daily” on the 3rd, industry insiders mentioned that Samsung Electronics’ China division has notified employees of job cuts and has started soliciting “voluntary resignations.” The expected scale of job cuts could involve 8% of the approximately 1600 regional sales employees, totaling around 130 people.
This wave of global job cuts at Samsung Electronics is heavily influenced by the anticipated downturn in consumer electronics product demand.
A source familiar with the plan informed Reuters that the job cuts are a response to the slowdown in technology product demand caused by the global economic deceleration. Another source mentioned that Samsung is seeking to support its profits by cost-saving measures.
Due to the sluggish recovery in global demand for smartphones and personal computers, some analysts have recently lowered profit expectations for the company, leading Samsung Electronics’ stock to drop to its lowest level in 16 months on Wednesday.
Apart from industry downturn, Samsung Electronics trailing behind main competitors in core product areas is another significant factor behind these job cuts.
Samsung’s primary chip business has been slower to recover compared to its rivals, with profits dropping to their lowest point in 15 years last year. In May of this year, Samsung replaced the head of its semiconductor division in an effort to overcome the “chip crisis” and catch up with smaller competitor SK Hynix, while also providing high-end memory chips for artificial intelligence chip modules.
In the high-end smartphone market, Samsung faces fierce competition from brands like Apple and Huawei, while in the chip manufacturing sector, it has long lagged behind TSMC.