Samsung Electronics to Lay Off 200 Executives Amid Sales Decline
New Delhi : Samsung Electronics is set to cut a significant portion of its executive workforce, approximately 9-10%, from its 2,000-strong managerial team. This move comes in response to a disappointing sales performance that has diminished the company's market share in India and led to a sharp decline in its market capitalization.
Reports indicate that Samsung Electronics will lay off over 200 executives across various functions within its Indian business. The reductions will affect sectors including mobile phones, consumer electronics, home appliances, and support functions. Employees in sales, marketing, and operations may also be impacted. Those being laid off will receive three months' salary as stipulated in their employment contracts, along with a severance package equivalent to one month's salary for every year of service.
Despite regaining its position as the leading smartphone brand in India in 2023—surpassing Xiaomi in the December quarter of 2022—Samsung fell to third place in market volume in the April-June quarter of 2024. During this period, the company's smartphone shipments dropped by over 15%, marking its third consecutive quarterly decline, with its market volume share falling to approximately 13%.
This decline has also affected its value market share, which decreased to 16% from 23% in the previous quarter and 21% a year earlier.
Sources suggest that Samsung is planning a restructuring of its operations, potentially involving the merger of certain business divisions. This restructuring could lead to further layoffs to streamline management layers, reduce manpower and overheads, and cut down on inefficiencies. Recently, Samsung's management brought the Indian team to South Korea to discuss ongoing issues and restructuring efforts. A decision on further actions may be expected after Diwali.
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