(Bloomberg) — Samsung Electronics Co. is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce global workforces by thousands of jobs, according to people familiar with the matter .
Most read on Bloomberg
The layoffs could affect about 10% of the workforce in those markets, although the numbers for each subsidiary may vary, said one of the people, who asked not to be named because the matter is private. Job cuts are planned in other foreign subsidiaries and could reach 10% in certain markets, the source said.
The South Korean company employs about 147,000 people overseas, more than half of its total workforce of more than 267,800, according to its latest sustainability report. It does not plan any layoffs in its domestic market.
Samsung staff in different teams in Singapore were summoned to private meetings with human resources managers and their line managers on Tuesday, and were briefed on details of the layoffs and severance packages, another person familiar with the matter said .
“Some foreign subsidiaries are making routine adjustments to their workforce to improve operational efficiency,” a Samsung spokesperson said. “The company has not set a target number for particular positions.”
Samsung shares have fallen more than 20% this year as the world’s largest maker of memory chips and smartphones struggles in key markets. It lags behind rival SK Hynix Inc. in memory chips used for artificial intelligence, and has made little progress compared to Taiwan Semiconductor Manufacturing Co. in producing custom chips for outside customers.
The task of guiding Samsung through its latest challenges now falls to Executive Chairman Jay Y. Lee, grandson of the company’s founder. The 56-year-old was acquitted of stock manipulation charges in February after years of legal problems.
Samsung finds itself in the unusual position of catching up with SK Hynix, which has taken the lead in producing high-bandwidth memory chips paired with Nvidia Corp.’s AI accelerators. to train artificial intelligence models. Samsung abruptly replaced the head of its chip business this year and the new chief, Jun Young-hyun, warned that the company must change its corporate culture or get caught in a “vicious cycle.”
The company has reduced the size of its workforce in the past as it navigated the notoriously cyclical memory chip market. Samsung recently cut about 10% of jobs in India and parts of Latin America, according to one of the sources.
Under its latest move, Samsung is expected to cut less than 10% of its total overseas workforce of 147,000, the source said. The company aims to preserve manufacturing jobs, while eliminating management and support functions. Figures will be affected by local labor regulations and financial priorities.
Samsung is also in conflict with its employees in South Korea. The tech giant’s largest union called the first strike in the company’s history in May.
(Updates with more business context starting in the seventh paragraph)
Most read from Bloomberg Businessweek
©2024 Bloomberg LP