Samsung Electronics Faces Layoffs Amid Struggles in AI Chip Competition
Samsung Electronics, the South Korean tech giant, is implementing significant cost-cutting measures as it faces fierce competition in the AI chip market and declining sales of its flagship products. In an effort to remain competitive, Samsung is reducing its workforce and scaling back on extravagant product launch events.
Global Layoffs and Workforce Reduction
According to a Bloomberg report, Samsung is expected to lay off approximately 10% of its overseas staff, which accounts for a significant portion of its 147,000 employees. This wave of layoffs has already impacted Samsung’s offices in Southeast Asia, Australia, and New Zealand. The company previously cut its workforce by 10% in India and parts of Latin America, signaling more reductions may follow in other regions. Samsung’s overseas staff represents more than half of its total employee base of 267,800.
An official from Samsung commented, “Some overseas subsidiaries are conducting routine workforce adjustments to improve operational efficiency. The company has not set a target number for any particular positions.”
Declining Earnings in Q3 2024
This development comes on the heels of Samsung’s recent announcement regarding its third-quarter 2024 earnings, which fell short of market expectations. The company cited its inability to keep pace with rivals, particularly in the fast-growing market for AI chips, as a key factor in its profit slump.
Market analysts predict Samsung’s Q3 2024 earnings to drop significantly, with expected profits around 10.4 trillion won. This decline is largely attributed to the company lagging behind competitors like Nvidia in the production of high-end AI chips, a critical component for next-generation technology.
Looking Forward
As Samsung continues to navigate these challenges, its focus on improving operational efficiency and adapting to the shifting demands of the AI and semiconductor industries will be crucial. The company is likely to face ongoing pressure from its competitors, especially in the AI chip market, as it strives to regain its footing in an increasingly competitive landscape.