By Samsung Electronics, the world’s leading maker of smartphones, TVs, and memory chips, is set to reduce its overseas workforce by up to 30% across some divisions, according to multiple sources cited by Reuters in a report.
The South Korean technology giant’s decision comes as it navigates a challenging business environment and seeks to improve efficiency.
Sources familiar with the matter told Reuters that the workforce reduction will primarily affect sales, marketing, and administrative staff.
While the company has yet to reveal the exact number of employees impacted or specific regions, the cuts are expected to hit multiple markets, including the Americas, Europe, Asia, and Africa.
One source confirmed that the cuts would be implemented by the end of 2024, though Samsung has refrained from commenting on the precise scope of the layoffs.
The company stated that these adjustments are routine and aimed at enhancing operational efficiency, without impacting production staff.
Global staff reduction to impact sales
The job cuts will particularly affect Samsung’s sales and marketing operations.
The company has instructed its subsidiaries to cut their workforce in these departments by about 15%, with administrative staff reductions reaching up to 30%.
As of the end of 2023, Samsung employed more than 267,800 people globally, with over half of them based overseas.
Sales and marketing staff account for around 25,100 employees, while 27,800 work in other areas such as administration.
The “global mandate” for layoffs was communicated to Samsung’s overseas divisions roughly three weeks ago.
Some countries have already begun executing the cuts, with sources revealing that Samsung’s India unit, for example, has started offering severance packages to mid-level employees.
In total, up to 1,000 jobs could be impacted in India, where Samsung employs approximately 25,000 people.
Reports indicate that similar measures are underway in China, with up to 30% of employees in Samsung’s sales operations expected to be affected.
Samsung facing tough competition
The decision to downsize comes at a time when Samsung faces growing challenges in its core business areas.
Its semiconductor division, which has traditionally been the company’s most profitable, has been slow to recover from a significant industry downturn that saw profits plunge to a 15-year low in 2023.
Although Samsung replaced the head of its semiconductor division in May 2024 to address this “chip crisis,” the company still trails behind rivals such as SK Hynix in the production of high-end memory chips.
In addition to its struggles in the chip market, Samsung is grappling with increasing competition in the premium smartphone segment, where it is up against strong rivals like Apple and China’s Huawei.
In India, which generates around $12 billion in annual revenue for Samsung, production has been disrupted by a strike over wages.
One source close to the situation said the job cuts are partly a preemptive measure in anticipation of a global slowdown in demand for technology products.
Another noted that the cuts are part of a broader cost-saving initiative designed to protect Samsung’s bottom line.
Potential domestic unrest amid overseas reductions
While the overseas cuts are moving ahead, it remains uncertain whether Samsung will implement similar measures in South Korea, where it is headquartered.
One source suggested that laying off staff in South Korea would be politically challenging due to the sensitivity surrounding employment issues.
Samsung Electronics, as part of the broader Samsung Group, is the largest private employer in the country, and any job losses could spark unrest both in the workforce and within the political sphere.
Indeed, Samsung recently faced a workers’ strike in South Korea, with employees demanding higher wages and better benefits.
Any further layoffs could exacerbate labor tensions, especially if they impact the domestic workforce.
Market impact and investor concerns
The announcement of Samsung’s planned layoffs comes amid a broader decline in the company’s stock performance.
Samsung Electronics shares have been trading at their lowest levels in 16 months, with analysts citing weak demand for smartphones and personal computers.
Some financial experts have lowered their profit estimates for the company, further impacting investor confidence.
As Samsung prepares for a period of belt-tightening, the company’s ability to navigate these economic and competitive pressures will be critical in determining its future trajectory.
With job cuts and cost-saving measures in place, Samsung aims to maintain its global leadership while responding to a rapidly shifting market landscape.
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