Samsung axes thousands of jobs in global layoff round, including S’porean ones. Why now?

Samsung Electronics is trimming its workforce across Southeast Asia, including Singapore, as part of a global reduction in headcount, reported The Business Times today.

These layoffs are reportedly part of a larger strategy to cut jobs in overseas subsidiaries, including Australia and New Zealand, aiming to reduce operational costs and increase efficiency.

While Samsung has faced challenges in its key markets, including a dip in shares and increased competition in the semiconductor sector, the company has stated that these workforce adjustments are routine.

Singapore employees affected by job cuts

According to an anonymous source (who is familiar with the situation) quoted by the news portal, Samsung employees in Singapore were called into private meetings with their HR and reporting managers on October 1, where they were informed of the layoffs.

The employees were provided details of their retrenchment and severance packages, marking a significant moment for Samsung’s Singapore team.

This comes as part of a larger wave of layoffs in Samsung’s Southeast Asian subsidiaries, which are expected to affect about 10% of the workforce in these regions, though the specific impact may vary by country.

For Singapore, this downsizing effort comes as a surprise for many employees, especially those working across various teams. 

Samsung’s restructuring plans, however, will reportedly avoid affecting manufacturing jobs, focusing instead on management and support roles.

Global workforce cuts: Why now?

Samsung’s decision to lay off workers globally stems from its struggle to maintain dominance in the memory chip and smartphone markets. The company has experienced a tough year, with its stock price falling by over 20%. 

According to The Business Times, competition from companies like SK Hynix in AI memory chips and Taiwan Semiconductor Manufacturing Co. in custom chip production has put pressure on Samsung’s financial performance. 

As part of its restructuring, Samsung has already reduced headcounts in markets like India and parts of Latin America. The cuts, though significant, will impact less than 10% of Samsung’s total overseas workforce of 147,000 employees.

Samsung’s response

The news portal quoted Samsung’s spokesperson as saying, “Some overseas subsidiaries are conducting routine workforce adjustments to improve operational efficiency.” 

They added that there are no specific target numbers for the cuts in any particular positions or locations. The adjustments aim to streamline management and support functions without compromising production roles, which remain a priority for the tech giant.

Samsung also confirmed that the layoffs will not affect its home market in South Korea.

However, Samsung’s relationship with its employees in South Korea has been tense, with the company facing its first-ever strike by unionised employees in May this year.

As Samsung navigates these turbulent times, the impact on its overseas workforce highlights the delicate balance of staying competitive in a rapidly evolving industry.

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