Samsung Electronics Co. is reportedly planning layoffs across its global operations in Southeast Asia, Australia and New Zealand, which could affect up to 10% of the company's workforce in these markets.
The staff in Samsung's Singapore were informed about their layoffs and severance package on Tuesday, Bloomberg reported, citing an unnamed source. The company doesn't plan any layoffs in its domestic market.
Headquartered in South Korea, Samsung is the largest manufacturer of memory chips and smartphones in the world, employing 147,000 staff overseas, which accounts for more than half of its total workforce of over 267,800, according to its latest sustainability report.
The report cited another person familiar with the situation as saying that the numbers for each subsidiary may vary. In its latest move to reduce global headcount by thousands of jobs, the tech giant is likely to cut less than 10% of its total overseas staff, the person said.
With the move, Samsung aims to protect manufacturing jobs while reducing management and support functions.
Following the news, the company stated that staff retrenchment is a routine adjustment aimed at improving efficiency. "Some overseas subsidiaries are conducting routine workforce adjustments to improve operational efficiency," a Samsung spokesperson said, adding, "The company has not set a target number for any particular positions."
Samsung's decision to cut jobs comes as it navigates challenges in the competitive AI market. The company has faced significant hurdles, including stiff competition from other tech giants.
The company has been facing challenges in maintaining its competitive position in key markets, leading to a decline in its shares by more than 20%.
Samsung appears to have fallen behind its rival SK Hynix Inc., particularly in the market for memory chips used for artificial intelligence applications.
SK Hynix edged out Samsung to emerge as a leader in producing high-bandwidth memory chips crucial for powering Nvidia Corp.'s AI accelerators to train artificial intelligence models, Reuters reported.
Samsung has also been struggling to match Taiwan Semiconductor Manufacturing Company in the production of custom-made chips for outside customers. Its also facing intense competition from Apple and Huawei in the global market for premium smartphones. The company's India operations were disrupted recently due to a workers' strike.
Earlier this year, Samsung appointed Jun Young-hyun as the head of its chip business, while 56-year-old Jay Y Lee took over as executive chairman. Lee, the grandson of the company's founder, was acquitted of stock manipulation charges in February after grappling with legal issues for years.
