According to four senior industry executives, Samsung Electronics, a major player in the smartphone market, is planning to fire over 200 executives across various functions from its Indian operations. The company’s growth has slowed down due to low consumer demand, which is affecting sales, and it is losing market share in its cash cow business of smartphones. The company is also trying to cut costs in order to increase profit.
There will be layoffs in the consumer electronics, home appliances, mobile phone, and support departments. This represents approximately 9–10% of the overall administrative staff of about 2,000 executives.
This occurs right before the vital holiday season, when workers at a Chennai plant went on an indefinite strike for the third day on Wednesday, affecting the manufacturing of refrigerators, televisions, and washing machines. The factory is still being operated by the corporation at between 50 and 80 percent of its maximum capacity.
According to the executives, the nation’s biggest producer of mobile phones and consumer electronics by revenue is also likely to reorganize its business. This could involve merging some business divisions, such as those that make televisions and home appliances, which could result in more layoffs. The ultimate choice will be made after Diwali, and this is done to decrease inefficiencies, manpower, overhead, and management levels.
The business has also stopped employing new personnel, and positions held by executives who have left on their own volition are not being filled. This could lead to a decrease in the number of off-roll workers.
In accordance with their employment contracts, those who are laid off are given three months’ pay in addition to a severance package that includes one month’s pay for each year of employment with the company.
A business official who was informed of the plans claimed that junior and mid-level compensation at Samsung India had soared during the company’s recent double-digit growth.
“The salaries were almost double of market salaries. This has necessitated a course correction since business has slowed down considerably. There is a clear push from Seoul headquarters to reduce costs in Indian operations. The layoff process has started and may increase after Diwali if the company is not able to get a substantial share of the sales,” a senior industry executive said.
The chief executive officer of a rival home appliance company said he is flooded with “frantic calls” and resumes from Samsung India executives for jobs. “Some of the people who have been laid off include senior executives as well who are ready to join us even at a substantial lower salary,” he said.
Senior executives from Samsung India’s mobile phone and electronics businesses left the company earlier this year. This includes Mohandeep Singh, one of the top two Indian executives who oversaw the company’s electronics and mobile phone divisions. According to his LinkedIn page, he left the company in June after serving as its chief executive for 14 years, during which time he headed its television division. He then became the chief executive of Jubilant Agri & Consumer Products.
After enjoying a few years of dominance over the Chinese competitors, Samsung has recently found itself under pressure in the mobile phone industry.
Samsung is still the market leader in terms of value, but Xiaomi has overtaken it in terms of volume sales, according to statistics from Counterpoint Research. According to Counterpoint, Samsung’s volume share in smartphones for the April–June quarter was 18.1%, down from 18.4% a year earlier when it was the largest by volume as well. Vivo’s share was 18.8% last quarter, trailed by Xiaomi’s 18.9%.
According to the report, Samsung has a far larger value share than the competition throughout the reviewed period—24.5%—followed by Vivo (16.8%) and Apple (16.3%).
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