Samsung Electronics Co. is poised to significantly reduce its global workforce, with layoffs planned across Southeast Asia, Australia, and New Zealand.
Sources close to the situation told Bloomberg that approximately 10% of the company’s employees in these regions could be affected.
While job cuts will vary by subsidiary, similar reductions are anticipated in other international markets.
Samsung, a South Korean tech giant, employs more than 267,800 people globally, with over half of its staff—around 147,000—based overseas, according to its latest sustainability report.
However, there are no immediate plans for layoffs in its domestic market.
Private meetings inform employees of retrenchments
In Singapore, Samsung employees from various departments were reportedly summoned to private meetings with HR and management on Tuesday, where they were informed about the upcoming layoffs and severance packages.
According to one insider, the move is part of routine workforce adjustments aimed at improving operational efficiency.
“Some overseas subsidiaries are conducting routine workforce adjustments to improve operational efficiency,” a Samsung spokesperson told Bloomberg, adding that the company has not set a specific target for cutting certain positions.
Market struggles weigh heavily on Samsung’s performance
The planned layoffs come as Samsung faces significant challenges in the global market.
The company, the world’s largest producer of memory chips and smartphones, has seen its shares tumble by more than 20% this year.
Struggles in the artificial intelligence sector have particularly affected its performance, as the company finds itself lagging behind competitors.
Samsung has notably lost ground to SK Hynix Inc., a domestic rival that has taken the lead in producing high-bandwidth memory chips, essential components for artificial intelligence training alongside Nvidia Corp.’s AI accelerators.
Furthermore, Samsung has struggled to compete with Taiwan Semiconductor Manufacturing Co. in the production of custom-made chips for external clients.
Samsung’s Executive Chairman, Jay Y. Lee, grandson of the company’s founder, now faces the challenge of steering the tech giant through these difficult times.
Lee, who was recently acquitted of stock manipulation charges, has taken the helm at a critical juncture as the company fights to regain its competitive edge.
In response to the company’s recent setbacks, Samsung made a leadership change earlier this year, replacing the head of its chip division. Jun Young-hyun, the new chief of the chip business, has emphasized the need for a cultural shift within the company to avoid falling into a “vicious cycle.”
Workforce reductions, labor disputes add to Samsung’s troubles
Samsung has a history of reducing its workforce during difficult periods in the volatile memory chip market.
Earlier this year, the company reportedly trimmed 10% of its jobs in India and parts of Latin America.
However, the latest round of cuts is expected to impact less than 10% of its overseas workforce of 147,000.
The reductions will primarily target management and support roles, while the company aims to protect its manufacturing jobs.
In addition to workforce reductions abroad, Samsung has been embroiled in labor disputes at home.
The largest union representing the company’s employees in South Korea called for its first-ever strike in May, further complicating matters for the tech giant.
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