South Korea’s tech conglomerate, Samsung Electronics, plans to lay off up to 30% of its overseas employees in some sectors as the company is struggling with its underperforming chip segment.
Samsung has advised their foreign branch to cut back sales and marketing staff roughly 15% and approximately 30% of their administrative staff.
The plan will be in effect by the end of this year and would have an impact on the jobs market worldwide. The amount of people that will lose their job is still uncertain.
Samsung statement on the matter said that the rearrangement of their workers overseas were regular procedure to improve operational efficiency. They claim that the plan has no specific targets, and will not impact the production staff.
At the end of last year, Samsung employed a total of 267,800 people, and more than half, or 147,000 of their workforces, are based overseas.
Majority of the jobs were in manufacturing and development, with sales and marketing staff accounting for 25,100 employees and 27,800 people working in other areas.
Samsung India has received the “global mandate” on jobs reduction from around three weeks ago, and have started offering compensation to some of their mid-level workers who were let go a few weeks ago.
As much as 1,000 people out of 25,000 Samsung India employees may have to leave India.
Meanwhile, in China, Samsung has sent notice about job cuts that could have affected about 30% of its workforces in sales operations according to a South Korean newspaper report from this month.
The lay off came in light of Samsung’s “chip crisis” as their chip manufacturing sector was underperforming compared to its competitor which drove the profit down to its lowest in the last 15 years.
In order to combat this, Samsung replaced the head of its semiconductor division in May, as it aims to catch up to SK Hynix, its smaller rival, in offering high-end memory chips used in artificial intelligence chipsets.
Samsung has to compete with Apple and Huawei in the premium smartphone market, but with its lackluster chip manufacturing contract with TSMC, and wages strike in India, the production was severely disrupted.
Some sources report that the plan to cut down jobs was made in preparation for a decrease in technological product demand as the global economy slows, while other sources claim that Samsung is trying to save costs to shore up its bottom line.
There was still a question about whether Samsung will downsize in South Korea too.
Laying off workers in South Korea will be a lot more difficult as Samsung Groups, with its electronic sector being its tip of the spear, is the nation’s biggest employer and has an important role in South Korea’s economy, and any wrong move could stir labor unrest in the country too.
