Recently, news emerged that one of the world’s largest electronics manufacturers, Samsung Electronics, is planning a large-scale workforce reduction. According to Reuters, up to 30% of employees in certain departments of the company may lose their jobs. Let’s delve into what is happening and the reasons behind this decision.
Which Departments are Affected?
Samsung has instructed its subsidiaries worldwide to reduce the number of employees in sales and marketing by 15% and administrative staff by up to 30%. This will impact employees in America, Europe, Asia, and Africa. In India, for example, around 1,000 employees are expected to be laid off. Even larger cuts are expected for sales staff in China, where up to 30% may lose their jobs.
Currently, it is unknown whether layoffs will occur in South Korea itself. However, sources indicate that this process is complicated due to the political sensitivity of the issue, as it could lead to strikes among employees.
Why is Samsung Reducing its Workforce?
The main reason for the layoffs is Samsung’s efforts to cope with market pressure. Samsung is facing significant challenges in its semiconductor business. Following a downturn in the industry last year, the company’s profits plummeted to a 15-year low. Now, Samsung is trying to catch up with competitors like SK Hynix in producing high-performance memory chips for artificial intelligence.
Additionally, the company is facing stiff competition in the premium smartphone market from Apple and Chinese Huawei. Furthermore, there is a global decrease in demand for technological products due to the slowing world economy.
What Lies Ahead for Samsung?
Samsung hopes to save costs through these layoffs and improve its financial performance. However, the company’s shares have already dropped to the lowest level in the past 16 months. Analysts continue to lower their profit estimates for the company due to weak demand recovery for smartphones and computers.
This decision demonstrates that even giants in the tech world face difficulties. It will be interesting to see how Samsung will deal with these challenges in the future.
Will This Affect Ukraine?
It is worth noting that Samsung has a research and development center in Kyiv. At the moment, it is unknown whether the layoffs will affect this division, but events are unfolding very dynamically, and we will be following the news.
