Samsung tightens its belt amid crisis winds

SEOUL: Samsung Electronics, a leading tech giant in smartphones and semiconductors, is seen implementing austerity measures, reducing headcounts and downsizing celebratory events as it falls behind global peers in its core product markets.
Last week, Bloomberg reported Samsung Electronics is expected to lay off about 10pc of its total overseas staff of 147,000, with the latest headcount cut being carried out in its headquarters in Southeast Asia, Australia and New Zealand.
The company already laid off about 10pc of jobs in India and some parts of Latin America, and is expected to further reduce headcounts in other overseas subsidiaries, the news outlet added, citing sources familiar with the matter.
Overseas staff make up more than half of the company’s total employees of more than 267,800.
Over the recent staff reductions, Samsung maintained its workforce adjustments are only a part of its “routine activity.”
“Some overseas subsidiaries are conducting routine workforce adjustments to improve operational efficiency,” a Samsung official said. “The company has not set a target number for any particular positions.”
Industry observers view the tech giant is tightening the belt amid declining performance in its core products including memory chips and home appliances.
Market analysts are lowering the earnings prospects for Samsung for the July-September period. Market Intelligence firm Yonhap Infomax collected the opinions of 16 securities firms last month and estimated Samsung’s operating profit for the third quarter to be 10.4 trillion won.
This is lower than the initial fore­cast of 14 trillion won, with securities firms recently lowering their expectations. iM Securities initially forecast Samsung to log an operating profit of 14.6 trillion won in Q3, but reduced it to 11.2 trillion won, down by 23.3pc . KB Securities estimates 9.7 trillion won while Korea Investment & Securities forecasts 10.3 trillion won.
Published in Dawn, October 7th, 2024