Samsung said it would cut thousands of jobs as it struggles in the AI market
Samsung Electronics Co. is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to cut its global workforce by thousands of jobs, according to people familiar with the situation.
The layoffs could affect about 10 percent of the workforce in those markets, although the numbers could vary by subsidiary, said one of the people, who asked not to be named because the matter is private. Job cuts are planned at other foreign subsidiaries and could be as high as 10 percent in certain markets, the person said.
The South Korean company has about 147,000 employees abroad, more than half of its total workforce of more than 267,800, according to its latest sustainability report. The company is not planning any layoffs in its home market.
Samsung employees from various teams in Singapore were called into private meetings with HR managers and their reporting managers on Tuesday and were briefed on the details of the retrenchment and layoff package, another person familiar with the matter said.
“Some foreign subsidiaries are making routine workforce adjustments to improve operational efficiency,” a Samsung spokesperson said. “The company has not set a target for any specific function.”
Shares of Samsung have fallen more than 20 percent this year as the world’s largest maker of memory chips and smartphones struggles in key markets. It has fallen behind rival SK Hynix Inc. in the memory chips used for artificial intelligence (AI), and has made little progress compared to Taiwan Semiconductor Manufacturing Co. in the production of custom chips for external customers.
The task of guiding 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 overtaking SK Hynix, which led the way in producing high-bandwidth memory chips paired with Nvidia Corp.’s AI accelerators. to train artificial intelligence models. Samsung abruptly replaced the head of its chip division this year and the newly appointed chief, Jun Young-hyun, warned that the company needed to change its workplace culture or it would enter a “vicious cycle.”
The company has reduced the size of its workforce in the past as it entered the notoriously cyclical memory chip market. Samsung recently cut about 10 percent of jobs in India and some parts of Latin America, one of the people said.
In the latest effort, Samsung will likely cut less than 10 percent of its total foreign workforce of 147,000 employees, the person said. The company aims to retain manufacturing jobs while eliminating management and support positions. The numbers will be influenced by local labor regulations and financial priorities.
Samsung has also had a falling out with employees in South Korea. The largest of the tech giant’s several unions called the company’s first-ever strike in May.
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