By Seunggyu Lim and Aditya Kalra
SEOUL/NEW DELHI (Reuters) -Samsung Electronics, the world's top maker of smartphones, TVs and memory chips, is cutting up to 30% of its overseas staff at some divisions, three sources with direct knowledge of the matter told Reuters.
South Korea-based Samsung has instructed subsidiaries worldwide to reduce sales and marketing staff by about 15% and the administrative staff by up to 30%, two of the sources said.
The plan will be implemented by the end of this year and would impact jobs across the Americas, Europe, Asia and Africa, one person said. Six other people familiar with the matter also confirmed Samsung's planned global headcount reduction.
It is not clear how many people would be let go and which countries and business units would be most affected.
The sources declined to be named because the scope and details of the job cuts remained confidential.
In a statement, Samsung said workforce adjustments conducted at some overseas operations were routine, and aimed at improving efficiency. It said there are no specific targets for the plans, adding that they are not impacting its production staff.
Samsung employed a total of 267,800 people as of the end of 2023, and more than half, or 147,000 employees, are based overseas, according to its latest sustainability report.
Manufacturing and development accounted for most of those jobs and sales and marketing staff was around 25,100, while 27,800 people worked in other areas, the report said.
The "global mandate" on job cuts was sent about three weeks ago, and Samsung's India operation was already offering severance packages to some mid-level employees who have left in recent weeks, one of the direct sources said.
The total employees who may need to leave the India unit could reach 1,000, the person added. Samsung employs some 25,000 people in India.
In China, Samsung has notified its staff about the job cuts that are expected to affect about 30% of its employees at its sales operation, a South Korean newspaper reported this month.
BIG CHALLENGES
The job cuts come as Samsung grapples with mounting pressure on its key units.
Its bread-and-butter chip business has been slower than its rivals in recovering from a severe downturn in the industry that drove its profit to a 15-year low last year.
In May, Samsung replaced the head of its semiconductor division in a bid to overcome a "chip crisis" as it seeks to catch up with smaller rival SK Hynix in supplying high-end memory chips used in artificial intelligence chipsets.
In the premium smartphone market, Samsung is facing stiff competition from Apple (NASDAQ:AAPL) and China's Huawei, while it has long lagged behind TSMC in contract chip manufacturing. And in India, which earns Samsung around $12 billion in annual revenue, a strike over wages is disrupting production.
One of the sources familiar with the plans said the job cuts were being made in preparation for a slowdown in global demand for technology products as the global economy slows. Another source said Samsung is seeking to shore up its bottom line by saving costs.
It was not immediately clear if Samsung will also cut jobs in its headquarters South Korea.
One of the sources said Samsung would find it difficult to lay off workers in South Korea because it was a politically sensitive issue. Conglomerate Samsung Group, of which the electronics giant is the crown jewel, is the country's biggest employer and plays a key role in its economy.
Job cuts could also stir labour unrest at home. A South Korean workers' union at Samsung Electronics (KS:005930) recently went on strike for several days, demanding higher wages and benefits.
Shares in Samsung Electronics, South Korea's most valuable stock, are trading at their lowest level in 16 months on Wednesday, as some analysts cut their profit estimates for the company recently, citing a weak recovery in demand for smartphones and personal computers.