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

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.

By Yoolim Lee and Olivia Poh, Bloomberg News | Updated: 3 October 2024 13:46 IST

Samsung is likely to cut less than 10 percent of its total overseas staff of 147,000

Highlights

Samsung is not planning layoffs for home market
The firm is in the unusual position of playing catch-up to SK Hynix
Samsung has also been feuding with employees in South Korea

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.

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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.

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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.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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