Samsung Electronics to lay off 10 percent of Asia-Pacific employees

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Samsung Electronics to lay off 10 percent of Asia-Pacific employees

Published: 02 Oct. 2024, 17:52 Updated: 02 Oct. 2024, 20:18

JIN EUN-SOO
jin.eunsoo@joongang.co.kr

Samsung Electronics' office in Seocho District, southern Seoul [NEWS1]

Samsung Electronics is laying off employees in the Asia-Pacific region as the Korean tech giant struggles to cut costs amid fierce competition in AI and chips.

Samsung Electronics is in the process of cutting employees in markets like Southeast Asia, Australia and New Zealand, which is expected to affect 10 percent of the work force in the regions, Bloomberg reported Wednesday. The layoffs could extend to other regional markets, the report said, that could influence as much as 10 percent of the employees for certain markets.

The Korean chip and smartphone producer is home to some 267,800 employees, 147,000 of whom are working at overseas operations.

The report said Samsung Electronics is not planning layoffs at its home office.

“Some overseas subsidiaries are conducting routine work force adjustments to improve operational efficiency,” a Samsung spokesperson said. “The company has not set a target number for any particular positions.”

Samsung Electronics is dealing with a number of labor issues at home and abroad as management refuses to accept pay raise requests from the workers.

On its home turf, Samsung Electronics has yet to settled wage negotiations with its labor union for the years of 2023 and 2024, not to mention for next year. The National Samsung Electronics Union, representing about 24 percent of the domestic work force, went on a full-fledged walkout earlier this year for the first time in the company's history.

Samsung workers who are on strike shout slogans during a protest near their plant in Sriperumbudur, Tamil Nadu, on Sept. 24.[AP/YONHAP]

Elsewhere, some 1,000 Samsung Electronics workers in India staged a street protest, demanding higher salary, which resulted in most of them being detained for causing public inconvenience.

Samsung Electronics is in a tight position, missioned with securing a leading edge in AI technology in smartphones, competing against rivals like Apple. It is also struggling to gain technological supremacy in chips, trailing behind SK hynix and TSMC.

In the premium AI memory sector, represented by high bandwidth memory (HBM), Samsung Electronics has admittedly failed to gain leadership. While its crosstown rival, SK hynix, has passed an HBM verification test from Nvidia, Samsung Electronics hasn't received a green light yet.

Most recently, SK hynix started mass-producing the 12-high HBM3E chips for the first time in the industry, which came as painful news to Samsung as it has been vying to snatch the “industry first” title for the 12-high product.

Samsung Electronics' shares have been in free fall, touching the 50,000 won ($37.92) level during trading on Wednesday for the first time in a year and nine months before closing at 61,300 won, a 0.33 percent drop from the previous trading day.

Morgan Stanley adjusted the company's target share price to 76,000 won, from 105,000 won, followed by Macquarie lowering it to 64,000 won to 125,000 won.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]