Samsung to allegedly cut 1,000 jobs in India due to pressure from Chinese rivals

Samsung is the largest mobile phone OEM by volume in the world, but its dominance in India is challenged by Chinese peers like Xiaomi, Vivo, Realme etc. The Korean manufacturer was at the leading smartphone brand in India until the second half of 2017 it lost this title to Xiaomi. The company has been moving forward aggressively with the new Galaxy M series and the refreshed Galaxy A series to recover its sales but the pressure doesn’t seem to end anytime soon. Samsung is now reportedly firing 1,000 employees as part of its cost-cutting endeavors.

Alongside the smartphone division, these jobs will also be cut from Samsung’s electronics arm which manufactures TVs as well as other home appliances. With this “cost rationalization” exercise – and reduction in margins, Samsung primarily aims to cut the prices of its smartphones and televisions. Since 2017, Samsung has already reduced the prices of these products by up to 40% to allure Indian consumer as the company faces challenges from Chinese rivals.

Samsung currently has nearly 20,000 employees in India and is reviewing the performance of nearly 10% of the employees. These employees are employed in the sales, marketing, R&D, manufacturing, finance, HR, and corporate relations departments.

Besides reevaluating the prices of its products, Samsung also intends to build a team for 5G-related development in India. The company will also decide on frozen recruitments based on the financial recovery following its job-cutting endeavor. A Samsung spokesman told The Economic Times that the company is conducting this exercise to create more jobs to make the business “more efficient and robust for long-term success.”

As per reports, Samsung has already begun the realignment of its workforce and laid off nearly 150 employees out of the intended 1,000. The exercise is set to be concluded by October of this year.

According to Tarun Pathak, the associate director at Counterpoint Research, Samsung was able to recover declining sales in the last quarter with the global success of the Galaxy S10 series. The company has also streamlined its portfolio of products and the recovery depends on consistent performance over the next few quarters.

Latest data reports that Xiaomi led online smartphone sales in the first quarter of this calendar year with a 43% market share, followed by Samsung at 15%, which is basically around one-third. Overall, Xiaomi leads the smartphone market with a 29% share while Samsung stands second with 23% of the sales.

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