Consumer electronic giant Samsung, India division has decided to layoff employees as it battling rising costs, weaker demand and pressure on margins.
Nearly 80 to 100 executives in the television and home appliance businesses have been asked to leave, according to a report. The affected employees include director-level executives and team leaders at Samsung’s headquarters. Branch and area managers have also been among those impacted.
As per records, Samsung’s electronic business sector has around 550 to 600 executives in sales and marketing, excluding its much larger smartphone sales organization. It is being learned that 25 percent of the sales and marketing workforce could be eventually laid off. Employees have been reportedly offered three months’ salary, along with an additional month’s salary for every year of service, as a token of appreciation during their departure.
According to an industry expert, Samsung’s Indian business is facing pressure on several fronts, like the memory chips, which have doubled the cost weakened rupee and delayed smartphone sales have squeezed the margin and raised the cost of operations for the South Korean tech giant, thereby causing them to lay off.
It must be noted that Samsung’s smartphone business will not be impacted by the current round of layoffs. The mobile division is likely to review its sales and performances, and another round of workforce rationalization is possible after Diwali, particularly in the TV and home appliances businesses.
The restructuring is not only limited to India. In the U.S., the company was reported to have laid off more than 700 jobs across its display, mobile and other consumer electronic operations. The reductions are part of an ongoing, part of an organization-wide effort to align roles with business priorities.
For Samsung India, the coming festive season could be the decider. A strong Diwali shopping period could provide some relief to the smartphone business. If the demand remains weak, the company would further consider changes in its workforce and sales structures.