Samsung India to Lay Off 200+ Execs! Are You at Risk in 2024

Samsung Electronics has announced it will lay off over 200 executives in India in 2024. This move will cut 9-10% of Samsung India’s managerial staff, which has about 2,000 executives. The reason behind this is the company’s slowing growth, less consumer demand, and a big drop in market share in smartphones.

The layoffs will hit different areas of Samsung India, like mobile phones, consumer electronics, home appliances, and support functions. This shows the tough times Samsung India is facing. The company is trying to get better and save money because of tough competition and a bad economy.

Key Takeaways

• Samsung India plans to lay off over 200 executives in 2024, representing 9-10% of its managerial workforce.
• The job cuts are a result of slowing business growth, declining consumer demand, and loss of market share in the smartphone segment.
• Various departments, including mobile phones, consumer electronics, home appliances, and support functions, will be affected by the layoffs.
• The restructuring effort aims to improve efficiency and cut costs in the face of intense competition and an economic downturn.
• Samsung India is considering merging certain business divisions, which could lead to further job losses.

Samsung Announces Job Cuts Amid Slowing Business Growth

Samsung Electronics, the world’s largest smartphone maker, plans to cut jobs. This is due to slower business growth and less demand from consumers. The company wants to reduce its overseas staff by up to 30% in different areas.

Subsidiaries worldwide will also cut sales and marketing staff by about 15%. They will reduce administrative staff by up to 30%.

Samsung is facing tough times in its smartphone business. It’s losing market share to rivals. The slowdown in global demand has hurt Samsung’s profits, leading to the need for cost cuts.

Declining Consumer Demand and Market Share Loss in Smartphone Segment

The job cuts are because of less demand for smartphones and Samsung’s shrinking market share. The global smartphone market is getting crowded, and people are keeping their phones longer. This has made it hard for Samsung to stay on top.

Chinese makers are offering affordable, feature-rich phones, which is hurting Samsung’s sales. This loss of market share is especially true in big markets like India and China.

Cost-Cutting Measures to Improve Profitability

Samsung is cutting costs to deal with its financial struggles. The job cuts are a key part of this plan. The company wants to make its operations more efficient and reduce expenses.

By cutting jobs, especially in sales, marketing, and admin, Samsung hopes to save money. It believes these steps will help it stay competitive and prepare for future growth.

Division	Planned Job Cuts
Sales and Marketing	15%
Administrative Staff	30%

The job cuts will affect Samsung’s operations globally. The company has 267,800 employees, with over half, about 147,000, working overseas.

As Samsung faces challenges, it remains focused on innovation and leadership. By cutting costs and focusing on profits, Samsung aims to come out stronger and ready for future opportunities in tech.

Departments Affected by the Layoffs

Recent news of job cuts at Samsung India has shocked many. The layoffs, set for 2024, will hit different areas hard. This includes mobile phones, consumer electronics, home appliances, and support functions.

Mobile Phones, Consumer Electronics, and Home Appliances

The mobile, consumer electronics, and home appliance teams will be hit hard. They face tough competition and falling sales. This has led to the need for cost cuts.

Over 150,000 people lost their jobs in tech in 2022. In January 2023, 68,500 more jobs were cut. The effect on these areas is huge.

Companies like Twitter, Amazon, Meta, Microsoft, and Alphabet have laid off between 1.1% and 58% of their staff. Samsung’s layoffs will also be significant, though exact numbers are unknown.

Department	Potential Impact
Mobile Phones	Reduced workforce in development, manufacturing, and sales
Consumer Electronics	Streamlined production and marketing teams
Home Appliances	Optimized supply chain and reduced sales force

Support Functions Also Impacted

Support areas like HR, marketing, and finance will also see job cuts. These roles are vital to the company’s success. Their downsizing will have big effects.

HR & Talent Sourcing roles have been hit hard in past layoffs. They made up 27.8% to 39.4% of cuts at Amazon, Meta, and Microsoft. Samsung’s restructuring will likely affect these areas too.

“The layoffs at Samsung India are a reflection of the growing pressures in the tech industry. As companies strive to remain competitive and profitable, tough decisions have to be made, and unfortunately, that often means letting go of talented employees across various departments.”

As Samsung goes through this tough time, supporting its remaining staff is key. It must ensure affected areas can still function well with fewer people.

Restructuring Plans Under Consideration

As Samsung India faces slower growth and a drop in market share, it’s looking at new ways to work better and make more money. This includes more than just the layoffs announced for 2024, which will affect over 200 executives.

One big part of Samsung’s plan is to merge some of its business areas. For example, it might bring together TV and home appliance units. This could make things more efficient and cut down on unnecessary costs. But, it might also mean more jobs lost as roles are combined and resources are used more wisely.

Potential Merging of Business Divisions

Merging business areas is a common move for companies looking to change. It helps them work better together, save money, and be more efficient. For Samsung, combining TV and home appliance units could save a lot of money and make things run smoother.

Layoffs are a common occurrence during organizational restructuring. Selecting employees for layoffs is a challenging task for HR professionals.

When Samsung India thinks about merging areas, it will have to think about its people. It might need to look at who has the right skills for the new teams. This could mean choosing who to lay off based on things like how long they’ve worked there, their job type, or their performance.

• Seniority-based layoffs
• Employee status (e.g., full-time, part-time, contract)
• Merit-based evaluations
• Skills-based assessments
• Multiple criteria decision-making

Further Job Losses Expected

Even though Samsung India is cutting over 200 jobs now, more layoffs might happen. As it merges areas and makes things more efficient, some jobs might not be needed anymore. This could be because the company’s goals have changed.

Years of Service	Severance Pay	Health Insurance Continuation Subsidy
4 or fewer completed years	4 weeks	4 weeks
5 or more completed years	1 week per full year of service	1 week per full year of service

To help those who lose their jobs, Samsung India plans to offer support. This could include money to help them move on and help with health insurance. How much and for how long will depend on how long they’ve worked there.

As Samsung India tries to stay ahead in a tough market, its plans to change are key to its success. By carefully merging areas and managing job losses, Samsung hopes to become more efficient and ready for the future of technology.

Hiring Freeze and Voluntary Departures

Samsung India is cutting down its workforce by not hiring new people. They won’t replace those who have left on their own. This move will make Samsung’s team smaller, possibly by cutting off-roll employees too.

When there’s no hiring, current workers have to do more. They might work with freelancers to keep up with customer needs. But, this can make them stressed and unhappy, leading to more people leaving.

A rival company’s CEO said they got many job applications from Samsung India’s top staff. These people were willing to take big pay cuts. This shows how tough it is for those who lost their jobs.

“The job finding rate explains the vast majority of variation in unemployment, and the proportion has only increased over time. From 1987 to 2010, variation in the job finding rate explained 90% of the variance in unemployment, while employment exit only explained 10%.”

Hiring freezes are a big deal, whether you’re a founder or an employee. The biggest worry for tech workers is finding a new job. For founders, it’s a sign of weakness if they slow down hiring.

Companies lay off workers when times are tough because it seems like everyone else is doing it. They try to look less bad by following the crowd. Samsung India is using voluntary departures to shrink its team.

Severance Packages for Laid-Off Employees

As Samsung India plans to lay off over 200 executives, they are offering severance packages. These packages aim to ease the transition for those affected. They are based on the employment contract and years of service.

In the tech sector, severance packages usually offer one to two weeks of pay for each year worked. But for Samsung India’s middle managers and executives, the pay is higher. They might get more than a year’s pay in their severance package.

Three Months’ Salary as Part of Employment Contract

The laid-off executives at Samsung India will get three months of salary. This base severance pay helps financially as they look for new jobs. It shows Samsung’s support during this tough time.

Additional Severance Based on Years of Service

Along with the three months’ salary, Samsung India offers more severance. They give one month’s salary for each year of service. This means longer-serving employees get more, for their loyalty and hard work.

Years of Service	Additional Severance
1-4 years	1-4 months’ salary
5-9 years	5-9 months’ salary
10+ years	10+ months’ salary

With a detailed severance package, Samsung India shows its commitment to its workers. They promise to help the affected employees get their benefits. They also aim to assist them as they move to new jobs.

Layoff Decision Driven by Competitive Pressures

Samsung has laid off over 200 executives in India due to tough competition. Chinese smartphone makers are gaining ground with affordable, feature-rich devices. Samsung must cut costs and increase revenue to stay ahead.

The smartphone market is crowded, with many options for consumers. This has hurt Samsung’s sales of premium phones, as people choose cheaper Chinese brands. Samsung is now looking to cut costs to stay profitable.

Rising Competition from Chinese Smartphone Manufacturers

Chinese brands like Xiaomi, Oppo, and Vivo are strong competitors to Samsung. They offer good phones at lower prices, making Samsung’s market share drop. Samsung must stay competitive and profitable.

Chinese brands now hold over 60% of the Indian market. Samsung’s share has fallen. This change forces Samsung to rethink its strategy and cut costs.

Need to Cut Expenses and Boost Revenue

Samsung needs to cut costs and increase revenue due to competition. Laying off 200 executives is part of this effort. Samsung aims to use resources better to grow and make more money.

Also, Samsung wants to make more money by selling different products and exploring new areas. It’s investing in new products and features. Samsung is also working with retailers to sell more.

Year	Samsung’s Market Share	Chinese Brands’ Market Share
2020	28%	45%
2021	25%	52%
2022	22%	58%
2023	20%	62%

The table shows Samsung’s market share dropping while Chinese brands grow. This shows Samsung’s need to act to stay competitive.

Despite challenges, Samsung aims to keep delivering quality products. It believes its plans, including layoffs, will help it come out stronger.

Ongoing Labor Dispute at Samsung’s Chennai Factory

Samsung faces big challenges in India due to a labor dispute at its Chennai factory. The factory, which makes important items like TVs, fridges, and washing machines, has seen its output drop. This is because of a three-day strike.

The strike, backed by the Center of Indian Trade Unions, wants better pay, better working conditions, and union recognition. Because of this, the factory is only working at 50-80% of its usual level. This is hurting Samsung’s ability to meet demand during the busy festive season in India.

Strike Affecting Production of Key Consumer Goods

The labor issue at the Chennai factory is affecting Samsung’s main products:

• Televisions
• Refrigerators
• Washing machines

This problem is especially tough for Samsung. The company needs strong sales during the festive season to increase its revenue and market share in India.

Factory Operating at Reduced Capacity

Day	Production Capacity
Day 1	50%
Day 2	60%
Day 3	80%

The strike has cut the factory’s capacity. On the first day, output was just 50%. But, it has slowly gone up to 80% over the last three days. Still, the factory isn’t running at full speed, making Samsung’s situation in India even harder.

“The ongoing labor dispute at our Chennai factory is a matter of great concern for Samsung. We are committed to finding a fair and amicable solution that addresses the concerns of our workers while ensuring the smooth operation of our production facilities.”

Now, Samsung must find a way to end the labor dispute fast. This is to avoid more damage to its production and sales in India.

Samsung’s Market Position and Future Outlook

Samsung has been a top player in the mobile and consumer electronics world for years. It keeps its lead with new products and strong sales. Even with tough economic times and more competition, Samsung aims to keep its share and bring the latest tech to people everywhere.

Maintaining Leadership in Mobile and Consumer Electronics Sales

Despite tough times, Samsung leads in India’s mobile and electronics sales. Its wide range of products, from phones to TVs and home appliances, keeps it strong. This variety helps Samsung stay on top.

To stay ahead, Samsung has made big moves. It changed its semiconductor team to tackle the “chip crisis” and keep up with rivals. These steps show Samsung’s dedication to leading in tech and meeting new consumer needs.

Challenges from Declining Smartphone Market Share

One big challenge for Samsung is losing smartphone market share, especially in the high-end segment. Chinese rivals and slower global demand have hurt its sales. Here’s how these issues have affected Samsung:

Metric	Impact
Pre-orders for Galaxy Z Fold 6 and Z Flip 6	Down by more than 10% year-over-year
Global smartphone shipments	Surpassed by Apple in January
Foldable phone market share	Lost to Huawei in May
Pre-orders for new foldables in South Korea	Only 910,000 units during the pre-order window

To tackle these issues, Samsung is cutting costs and streamlining operations. It plans to reduce its overseas workforce by up to 30% in some areas. This should help Samsung stay competitive despite losing smartphone market share.

Despite the hurdles, Samsung is optimistic. It’s known for its brand, wide product range, and focus on innovation. Samsung is ready to face challenges and keep its lead in the mobile and electronics markets.

Conclusion

Over 200 executives at Samsung India face layoffs in 2024. This move is due to slower business growth and less demand. The company is also facing tough competition in the smartphone market.

By cutting costs and improving profits, Samsung hopes to stay strong. It wants to keep up with the changing market.

Even with tough times, Samsung is still a big player in India’s mobile and electronics world. It’s helping its laid-off workers with severance packages and job search help.

Looking ahead, Samsung India must deal with the global economic slowdown and strong competition. It plans to stay ahead by innovating, being efficient, and focusing on customers. This way, Samsung can keep growing and succeed in India and worldwide.

FAQ

Why is Samsung India laying off over 200 executives in 2024?

Samsung India is cutting over 200 jobs in 2024. This is due to slower business growth and less demand from consumers. The company also lost market share in its key smartphone segment. These layoffs are part of efforts to boost profitability.

Which departments will be affected by the layoffs at Samsung India?

The layoffs will hit various areas. This includes mobile phones, consumer electronics, home appliances, and support functions.

Is Samsung considering any restructuring plans in India?

Yes, Samsung is thinking about restructuring in India. They might merge divisions like TVs and home appliances. This could lead to more job losses. The goal is to make operations more efficient by cutting costs.

What severance benefits is Samsung offering to laid-off employees?

Samsung is giving laid-off workers three months’ salary. They also have a severance package. This includes one month’s salary for each year of service. The company promises to support these workers during the transition.

What factors have driven Samsung’s decision to reduce its staff in India?

Samsung is cutting staff in India due to a drop in smartphone market share. Chinese rivals are also increasing competition. The company wants to reduce costs and boost revenue.

How is the ongoing labor dispute at Samsung’s Chennai factory affecting the company?

A labor dispute at Samsung’s Chennai factory is causing problems. It’s affecting production of TVs, refrigerators, and washing machines. The factory is running at 50-80% capacity, putting pressure on the company before the festive season.

Despite the challenges, what is Samsung’s market position in India?

Samsung still leads in mobile and consumer electronics sales in India. But, it faces growing competition and a drop in smartphone market share.

Is Samsung implementing workforce reductions in other countries as well?

Yes, Samsung Electronics is cutting up to 30% of staff overseas. This is in response to slower growth and industry-wide challenges.

Source Links

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