Proactive Preparation for Economic Slowdown in Gyeonggi... Maximizing Profits through Cost Reduction
Samsung Electronics is reportedly planning to reduce its overseas workforce in some business units by up to 30%. Analysts interpret this as a preemptive measure to prepare for concerns over a global economic slowdown and to maximize profits through cost reduction.
On the 11th (local time), major foreign media outlets cited sources reporting that Samsung Electronics has instructed its subsidiaries worldwide to cut sales and marketing staff by 15% and management staff by up to 30%.
The reduction plan is expected to be implemented by the end of the year and will span major continents including the United States, Europe, Asia, and Africa. The exact scale of the layoffs and which regions and business units will be affected have not been disclosed.
Samsung Electronics stated, "The workforce adjustments made at some overseas business sites are routine measures aimed at improving efficiency," adding, "There is no specific layoff plan. Production staff will not be affected."
According to Samsung Electronics' recent sustainability report, as of the end of 2023, the company had 267,800 employees worldwide, with more than half, 147,000, working overseas. The majority are manufacturing and development personnel, with 25,100 in sales and marketing, and 27,800 in other roles.
Through this workforce restructuring, Samsung Electronics is reported to reduce 1,000 employees out of 25,000 in India. According to earlier domestic media reports, the company recently notified employees in China about restructuring and is expected to cut 30% of its sales staff there.
This layoff move comes amid growing pressure on Samsung Electronics' core business units such as semiconductors and smartphones, against the backdrop of a forecasted global economic slowdown. The semiconductor division's operating profit fell to its lowest level in 15 years last year, and the premium smartphone market faces fierce competition from Apple and Chinese companies. In India, production has been disrupted due to strikes over wage issues.
In the securities market, Samsung Electronics' earnings guidance has been lowered. Over 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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