Samsung Plans Job Cuts Amid AI Market Struggles and Global Restructuring

Samsung Said to Cut Thousands of Jobs Amid Struggles in AI Market

The firm is in the unusual position of playing catch-up to SK Hynix Samsung Electronics Co. is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce global headcount by thousands of jobs, according to people familiar with the situation. The layoffs could affect about 10 percent of the workforces 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 for other overseas subsidiaries and could reach 10 percent in certain markets, said the person. The South Korean company has about 147,000 staff overseas, more than half of its total employees of more than 267,800, according to its latest sustainability report. It's not planning layoffs in its home market. Samsung staff across different teams in Singapore were called into private meetings on Tuesday with HR managers and their reporting managers, and were informed of the retrenchment and severance package details, said another person familiar with the matter. "Some overseas subsidiaries are conducting routine workforce adjustments to improve operational efficiency," a Samsung spokesperson said. "The company has not set a target number for any particular positions." Samsung shares have slid more than 20 percent this year as the world's largest maker of memory chips and smartphones struggles in key markets. It's fallen behind rival SK Hynix Inc. in the memory chips used for Artificial Intelligence (AI), and has made little progress against Taiwan Semiconductor Manufacturing Co. in the production of custom-made chips for outside customers. The task of leading 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 troubles. Samsung is in the unusual position of playing catch-up to SK Hynix, which took the lead in producing the high-bandwidth memory chips that are 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 newly appointed chief, Jun Young-hyun, warned the company had to change its workplace culture or get caught in a "vicious cycle." The company has reduced the size of its workforce in the past as it's navigated the notoriously cyclical memory chip market. Samsung recently trimmed about 10 percent of jobs in India and some parts of Latin America, according to one of the people. In the latest push, Samsung is likely to cut less than 10 percent of its total overseas staff of 147,000, the person said. The company aims to preserve manufacturing jobs, while it cuts management and support functions. The figures will be affected by local labor regulations and financial priorities. Samsung has also been feuding with employees in South Korea. The largest of the tech giant's several unions called the company's first strike ever in May. © 2024 Bloomberg L.P.

Samsung to Cut Thousands of Jobs Amid AI Struggles

Samsung, facing challenges in the artificial intelligence sector, is cutting staff at its subsidiaries in Australia, New Zealand and South East Asia. This reduction could affect up to 10% of Samsung's 150,000 employees abroad. Redundancies have also been reported in India and Latin America, mainly affecting management and support positions, not production. The company's share price has fallen by more than 20%, reflecting its difficulties in remaining competitive, particularly against SK Hynix in the field of high-bandwidth memory chips and TSMC in the foundry sector.

Samsung says planning job cuts in some Asian operations

Samsung Electronics said Wednesday it was planning to cut jobs in some of its Asian operations, after a report that one in ten posts in affected markets could be axed. The world's largest memory chipmaker is modifying staffing levels in Southeast Asia, Australia, and New Zealand, a company spokesman told AFP, adding that "the adjustments include job cuts". The "routine workforce adjustments" are carried out "to improve operational efficiency," said Samsung Electronics in a statement. "The company has not set a target number for any particular positions," added the maker of Galaxy smartphones. Bloomberg reported however that the layoffs could affect about 10 percent of the workforce in those markets. The Suwon-based firm employs more than 267,800 workers, with more than half of its total workforce abroad. The cuts came after US chipmaker Intel announced in August that it would slash more than 15 percent of its workforce as it tries to streamline operations following a reported loss of $1.6 billion in the second quarter. In contrast, Samsung saw its fastest growth since 2010, with operating profits soaring in the second quarter to 10.44 trillion won, as chip prices rebounded and demand for generative AI continued to grow. The figure represents a 1,462.29 percent increase from 670 billion won in the same period a year earlier, exceeding market expectations. The company is the flagship subsidiary of South Korean giant Samsung Group, by far the biggest of the family-controlled conglomerates that dominate business in Asia's fourth-largest economy.