Anindita Chatterjee
Updated on: October 16, 2024 7:20 am GMT
In a significant move, Samsung Electronics Co. is set to cut thousands of jobs across Southeast Asia, Australia, and New Zealand. This decision stems from ongoing struggles in the competitive artificial intelligence (AI) and memory chip markets.
Job Cuts Impacting Southeast Asia and Beyond
The layoffs are anticipated to affect about 10 percent of the workforce in these regions as part of a broader strategy to reduce Samsung’s global headcount. A source familiar with the situation stated that the employee count in each subsidiary may differ, but it will involve a substantial reduction.
Samsung currently employs over 147,000 staff overseas, which makes up more than half of its total 267,800 employees worldwide, as noted in its latest sustainability report. The company is not planning any job cuts in its home country of South Korea, focusing instead on improving operations in international markets.
Details on the Retrenchments
On October 1, Samsung employees in Singapore were called into private meetings with human resources and their managers. They were informed about the layoffs and the details regarding severance packages. The exact number of employees affected was not disclosed, but the possibility of job cuts raises concerns among workers.
- Samsung spokesperson stated:
– “Some overseas subsidiaries are conducting routine workforce adjustments to improve operational efficiency.”
– The company does not have a specific target number for layoffs.
Challenges in the Market
Samsung’s troubles come amid a more than 20 percent decline in share prices in 2024. The company has faced particular challenges in the memory chip sector, where it has fallen behind competitors like SK Hynix and Taiwan Semiconductor Manufacturing Co. (TSMC).
The new executive chairman, Jay Y. Lee, is now at the helm, tasked with steering Samsung through these tough times. Lee, who recently overcame legal challenges related to stock manipulation, has to manage a transitioning company that is currently trying to catch up in the high-bandwidth memory chip market, essential for training AI models.
Workplace Culture Changes
In a recent development, Samsung appointed Mr. Jun Young-hyun to lead its chip business. He expressed concerns that the company must change its workplace culture. He warned that failing to adapt could result in a “vicious cycle” that harms productivity and growth.
- Previous job cuts:
– Samsung has cut about 10 percent of its workforce in India and parts of Latin America recently.
– The latest layoffs may affect less than 10 percent of its total overseas staff.
The company is aiming to preserve manufacturing jobs while mainly targeting reductions in management and support positions. Factors like local labor laws and financial needs will influence the final decisions regarding layoffs.
Labor Relations and Future Outlook
Samsung has faced unrest at home as well. In May, the company experienced its first-ever strike by a major union, highlighting ongoing tensions between management and workers. The current layoffs may further complicate labor relations as employees grapple with job security.
Samsung is cutting jobs in Southeast Asia, Australia, and New Zealand as it tries to deal with tough economic times. The company is changing its leaders and needs to adjust to what customers want. While it reorganizes, many workers are unsure about their future. People in the tech industry are paying close attention to see how Samsung handles these difficult challenges as it works to stay competitive in a fast-changing world.
