By Juliet Umeh (with agency reports)

Samsung Electronics, a global leader in smartphones, TVs, and memory chips, is planning significant staff reductions, cutting up to 30 per cent of its overseas workforce in some divisions, according to three sources with direct knowledge of the situation.

“The South Korea-based company has reportedly instructed its subsidiaries worldwide to reduce sales and marketing staff by around 15 per cent, with administrative roles facing cuts of up to 30 per cent, according to two of the sources.

These changes are expected to take effect by the end of the year, impacting jobs across the Americas, Europe, Asia, and Africa, one person said.

Six additional sources also confirmed Samsung’s global headcount reduction plans.

Details on the exact number of layoffs or the specific countries and business units affected remain unclear, as the sources requested anonymity, citing the sensitive nature of the plans.

However, in a statement, Samsung described these workforce adjustments as routine measures to improve efficiency, emphasizing that no specific targets had been set and that production staff would not be affected.“

As of the end of 2023, Samsung employed a total of 267,800 people, with more than half—around 147,000—working overseas, according to its latest sustainability report. The majority of these jobs are in manufacturing and development, with approximately 25,100 in sales and marketing, and 27,800 in other departments.

A “global mandate” on job cuts was issued about three weeks ago. Samsung’s India operations have already begun offering severance packages to some mid-level employees, with up to 1,000 employees potentially affected, one of the direct sources noted. Samsung employs about 25,000 people in India.“

In China, Samsung has informed employees that its sales operations could see up to 30% of staff cut, as reported by a South Korean newspaper earlier this month.

These job cuts come amid increasing challenges for Samsung. Its semiconductor business, a core revenue driver, has struggled to recover from a downturn in the industry, which pushed the company’s profits to a 15-year low last year. In May, Samsung replaced the head of its semiconductor division to address what has been dubbed a “chip crisis” and to better compete with rival SK Hynix in the supply of high-end memory chips used in AI systems.“Additionally, in the premium smartphone market, Samsung faces stiff competition from Apple and China’s Huawei, while it trails behind TSMC in contract chip manufacturing. In India, where Samsung earns around $12 billion annually, a wage strike is also affecting production.“One source noted that the cuts are partly in preparation for a slowdown in global demand for tech products amid a slowing global economy. Another suggested that the company is looking to bolster its bottom line through cost savings.“It remains uncertain whether job cuts will also occur in Samsung’s South Korean headquarters. One source pointed out that layoffs in South Korea would be politically sensitive due to the company’s significant role in the nation’s economy. Samsung Group, of which Samsung Electronics is a key unit, is South Korea’s largest employer.“Job cuts in South Korea could also trigger labor unrest. Recently, a workers’ union at Samsung Electronics went on strike for several days, demanding higher wages and benefits.