Samsung Electronics to Cut as Much as 30% of Its Workforce, in Order to Reduce Costs
Samsung or better said Samsung Electronics intends to cut costs by reducing its workforce by as much as 30%. These changes will affect both the managerial level and the regular workers in factories. Officials from Samsung claim that “workers with mediocre performance” will be let go, with “sizable compensations”.
Layoffs will happen in countries where Samsung runs manufacturing plants and HR officials are meeting with employees to convince them to join a “voluntary retirement system”. It will be interesting to see how many employees from Samsung Electronics will be let go, since that is the biggest revenue source of the entire Samsung Group. Industry watchers expect that Samsung Electronics will fire as much as 30%, while other branches may cut even more.
Samsung has been feeling the challenges posed by the successful Chinese device makers, with bigger and bigger sales over the past years. Even though the South Koreans have had excellent products this year, the Galaxy Note 5 and Galaxy S6 aren’t enough to stop Xiaomi’s growth. An official from the company claims that underperformers and managers over 50 will also be let go and those who have failed to be promoted to a higher level.
Samsung Heavy Industries, that deals with shipbuilding and Samsung SDI, the battery making branch will also be affected. Human resources and marketing departments will get their own layoffs. We’ll learn more about the management replacement in December.