Samsung to lay off up to 30% of global workforce in some divisions

Samsung Electronics, the leading global producer of smartphones, TVs, and memory chips, is set to cut up to 30% of its overseas workforce in certain divisions, according to an exclusive report from Reuters that cites three individuals with direct knowledge of the situation.

Samsung now joins a growing list of tech companies cutting staff this year. Just last month, Cisco revealed plans for another round of layoffs, affecting thousands of employees, as the U.S. networking giant pivots toward faster-growing areas such as cybersecurity and AI.

Sources told Reuters that Samsung, headquartered in South Korea, has instructed its subsidiaries worldwide to reduce sales and marketing teams by roughly 15% and administrative staff by up to 30%. The cuts are expected to be completed by the end of the year and will impact jobs across the Americas, Europe, Asia, and Africa. Six additional people familiar with the plans also confirmed the upcoming global reductions.

“South Korea-based Samsung has instructed subsidiaries worldwide to reduce sales and marketing staff by about 15% and the administrative staff by up to 30%, two of the sources said,” Reuters reported.

The exact number of employees affected, as well as the specific countries and business units involved, remain unclear. The sources requested anonymity due to the confidentiality surrounding the details of the job cuts.

In a statement, Samsung described these workforce adjustments as routine measures aimed at enhancing efficiency and stated there were no specific targets for these changes. The company emphasized that its production staff would not be impacted.

According to its latest sustainability report, Samsung employed 267,800 people at the end of 2023, with more than half, or 147,000 employees, working outside of South Korea. Most of these jobs are in manufacturing and development, while sales and marketing staff account for around 25,100 positions, and 27,800 employees work in other areas.

Reuters added that the directive for the global layoffs was reportedly issued about three weeks ago. In India, Samsung has already started offering severance packages to some mid-level employees, and up to 1,000 positions could be affected, according to one source. Samsung employs approximately 25,000 people in India. In China, the company has informed staff that around 30% of its sales operation workforce may be cut, as reported by a South Korean newspaper.

The cuts come as Samsung faces increasing challenges in its core business areas. Its semiconductor division has been slower to recover from a major downturn than its competitors, resulting in a 15-year low in profits last year.

In May, Samsung replaced the head of its semiconductor unit to address this “chip crisis” and to compete more effectively with smaller rival SK Hynix in the high-end memory chip market, which is crucial for artificial intelligence applications.

Meanwhile, Samsung is contending with strong competition from Apple and China’s Huawei in the premium smartphone market, and it has long trailed behind TSMC in contract chip manufacturing. In India, a key market that brings in about $12 billion in annual revenue, production has been disrupted by a strike over wages.

One source indicated that the job cuts are being made in anticipation of reduced global demand for technology products due to the slowing global economy. Another source mentioned that Samsung is looking to strengthen its financial position by cutting costs.

It remains unclear whether job cuts will also occur at Samsung’s headquarters in South Korea. One insider suggested that layoffs in South Korea could be politically challenging, given the company’s status as the country’s largest employer and its significant role in the national economy.