Samsung To Cut Jobs Globally, Up To 30% In Some Divisions

In the last few months, Samsung reached an agreement to acquire Oxford Semantic Technologies to boost its artificial intelligence (AI) capabilities, hit a huge AI chip order with Japanese AI company Preferred Networks, was awarded $6.4 billion in grants by the US government to boost its chip fabs in the country and more.

However, the latest news coming out of this global technology conglomerate hasn’t been all positive.

This includes the company considering a plan to let go of a considerable number of workers worldwide, as per reports.

So, what was reported about the company’s job-cutting plan? Let’s explore!

What Was Revealed About Samsung’s Layoffs?

 

• Samsung Electronics is gearing up for a global layoff spree, according to three sources with direct knowledge of the matter, who conveyed the information to Reuters.

• The sources chose to remain anonymous as the details and scope of the layoffs are still confidential, however, the plan to cut jobs was confirmed by six other people familiar with the matter.

• The move is set to impact Samsung employees across the Americas, Europe, Asia and Africa, with the company telling its subsidiaries to cut sales and marketing jobs by 15% and administrative staff by up to 30%.

• Samsung provided a statement saying, “workforce adjustments conducted at some overseas operations were routine.”

• Such kinds of moves are made to improve efficiency. Its current plan doesn’t have any specific targets and will not affect its production staff.

• The plan is expected to be executed by the end of 2024.

• Samsung’s “global mandate” to cut jobs was sent out three weeks ago, while its India operations was already offering severance packages to mid-level employees.

• As of 2023, the company employed around 267,800 workers, with more than half of them (147,000) working overseas.

• From this, Manufacturing and development made up the majority of Samsung's jobs, with 25,100 people working in sales and marketing and 27,800 in other areas.

• In India, the company will look to let go off 1,000 people from its around 25,000 people workforce.

• In China, the company is set to layoff around 30% of its sales staff.

• As for its home country, it remains unclear if Samsung would cut jobs as it could face backlash due to it being a politically sensitive issue, seeing how Samsung Electronics’ parent company Samsung Group is the country's biggest employer and plays a crucial role in its economy.

• The plan comes at a time when the company is facing a wide range of challenges.

What Challenges Is Samsung Facing?

 

• In the last few days Apple unveiled its iPhone 16 series, which was met with great aplomb, while Huawei revealed its new trifold phone, in a bid to challenge Apple’s and Samsung’s hold on the smartphone market.

• While Huawei’s new phone is currently only available in the world’s largest smartphone market, China, the company’s products remain a challenge to Samsung globally.

• This challenge also extends to its chip-making business, where the company is taking longer than its rivals to bounce back from a drop in demand, which resulted in its lowest profit earnings in the last 15 years.

• The company also replaced the head of its semiconductor division to overcome its chip challenges and catch up with SK Hynix and capture a stronger position in the AI chip market.

• As per one of the sources familiar with Samsung’s layoff plan, the move is being made to prepare for a slowdown of global demand for technology products, while the company strengthens its bottom line.

• Adding to all its woes, its employees in India (ongoing) and South Korea went on strike recently (separate occasions) also went on strike. The workforce in South Korea were demanding higher wages and benefits, while Indian workers demanded higher wages and even paused production.

• The company also had to deal with two former Samsung Electronics executives, Choi and Oh, stealing its semiconductor technologies and attempting to replicate the entire chipmaking facility in China. The two were also said to have collaborated with Chinese officials.

• The technologies were valued at $3.2 billion.

• The two were arrested on charges of industrial espionage by South Korean authorities.

Do you think Samsung will be able to turn its fortunes around with its layoff plan?

Let us know in the comments below!