Samsung Adopts Cost-Cutting Measures Amid Market Challenges
Samsung Electronics, a global leader in smartphones and semiconductors, is taking significant steps to streamline its operations, including staff reductions and scaling down celebratory events. These actions come as the company struggles to maintain its competitive edge in key markets against global competitors.
According to a report by Bloomberg, Samsung plans to reduce its overseas workforce by about 10%, affecting approximately 147,000 employees across its international operations. The latest round of layoffs has already started, impacting regions like Southeast Asia, Australia, and New Zealand.
The company had previously reduced its workforce by around 10% in countries like India and parts of Latin America. Further cuts are anticipated in other international branches, as confirmed by sources close to the matter. Overseas staff currently account for over half of Samsung’s total global workforce of 267,800 employees.
While these cuts are substantial, Samsung has emphasized that these workforce adjustments are part of its routine efforts to improve operational efficiency. “Some overseas subsidiaries are conducting routine workforce adjustments to improve operational efficiency,” a Samsung representative stated, clarifying that there is no specific target for any particular job roles.
Industry experts suggest that these cost-cutting measures reflect the company’s response to declining performance in its core products, such as memory chips and home appliances. As competition intensifies and global demand softens, Samsung has been forced to tighten its belt.
Market analysts have also lowered their forecasts for Samsung’s earnings in the third quarter. A survey conducted by Yonhap Infomax among 16 securities firms estimated Samsung’s operating profit to be around 10.4 trillion won, a drop from the earlier forecast of 14 trillion won. Firms like iM Securities revised their estimates, cutting Samsung’s expected Q3 profits from 14.6 trillion won to 11.2 trillion won, a 23.3% decrease. Other firms, such as KB Securities, predict profits of 9.7 trillion won, while Korea Investment & Securities estimate around 10.3 trillion won.
As Samsung navigates these challenging times, it remains focused on enhancing efficiency to weather the ongoing economic headwinds.
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