“Samsung Electronics, large-scale global workforce reduction… up to 30% of management positions laid off”

Preemptive preparation for economic slowdown… Maximizing profits through cost reduction

It has been reported that some business divisions will reduce their overseas workforce by up to 30%. Analysis suggests that this is a measure to preemptively prepare for concerns about a global economic slowdown and maximize profits through cost reduction.

On the 11th (local time), major foreign media outlets reported, citing sources, that Samsung Electronics had instructed its global subsidiaries to reduce sales and marketing staff by 15% and management staff by up to 30%.

The layoffs are expected to take place by the end of the year and will reportedly be spread across major continents including the US, Europe, Asia and Africa. The exact scale of the layoffs and which regions and business units will be affected by the layoffs are not known.

Samsung Electronics said, “The personnel adjustments made at some overseas business sites are routine measures to improve efficiency,” and added, “There are no specific plans for layoffs. Production workers will not be affected.”

According to Samsung Electronics’ recent sustainability report, the number of employees worldwide will be 267,800 as of the end of 2023, of which more than half, or 147,000, will be working overseas. Manufacturing and development personnel account for the majority, while sales and marketing personnel account for 25,100, and other personnel account for 27,800.

With this restructuring, Samsung Electronics is said to be laying off 1,000 of its 25,000 employees in India. According to previous domestic media reports, the company recently notified its employees in China of the restructuring and is said to be laying off 30% of its sales force.

The layoffs come amid growing pressure on Samsung Electronics’ core business units, including semiconductors and smartphones, amid the global economic slowdown outlook. The semiconductor division saw its operating profit drop to its lowest level in 15 years last year, and is facing fierce competition from Apple and Chinese companies in the premium smartphone market. In India, strikes over wage issues are disrupting production.

The securities industry is lowering its Samsung Electronics performance guidance (outlook). In the past month, securities firms’ forecasts for Samsung Electronics’ third-quarter operating profit have decreased by 2.9% from 13.66 trillion won to 13.26 trillion won.

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