It seems like the job market has never been this uncertain for this long. We’re hearing layoff stories every other day, with employees living in constant fear of losing their jobs. 2023 alone saw 2012 layoffs at tech companies, impacting around 429,608 people. Experts believe that job cuts are due to a mix of factors including economic downturn, overhiring, and technological growth.
Widespread layoffs, while done mostly to cut operational costs, might end up having far-reaching consequences. What starts with a rise in unemployment, translates into a drop in consumer spending, and eventually a potential economic crisis.
Now, the South Korean tech giant Samsung Electronics has added to the frenzy by announcing its layoff plans. The company announced that it plans to cut down its employee strength by 10%, amidst the heat of increasing competition. Let’s have a closer look at the story.
According to a Bloomberg report, Samsung Electronics announced plans to lay off its workers in Southeast Asia, Australia and New Zealand. While the move is said to potentially impact 10% of the workers across these regions, the headcount for each subsidiary may vary.
With a total strength of approximately 267,800 workers, the company has most of its strength working overseas— with over 147,000 workers. However, as per people familiar with the situation, it is not planning any job cuts in the home market. The entirety of the layoffs are planned for its overseas destinations.
As per reports, employees in Singapore were called into private meetings with the management and human resources to discuss future plans and severance packages. In fact, the company has a history of laying off its workers in response to fluctuating market conditions. For example, it recently laid off 10% of its employees across India and Latin America during its restructuring efforts.
In this round of layoff, Samsung is expected to hold on to its workers in the manufacturing department, while trimming the management and support departments. The final severity of the job cuts will be dictated by labor laws and financial considerations.
It has been a challenging year for Samsung. Its shares have slid more than 20% this year as it struggled to thrive in key markets. It has fallen behind its competitor SK Hynix Inc. in the memory chips used for artificial intelligence, and it seems to be losing its hold as the largest manufacturer of memory chips and smartphones. The company has also made little to no progress in its race against Taiwan Semiconductor Manufacturing Co. for producing custom-made chips.
While attempting to catch back up to SK Hynix, the company has taken some bold restructuring decisions. “Some overseas subsidiaries are conducting routine workforce adjustments to improve operational efficiency. The company has not set a target number for any particular positions," a Samsung spokesperson said. It has even replaced the head of its chip business and appointed Jun Young-hyun as the new chief. Young-hyun has already warned the company to shift its workplace culture to avoid getting stuck in a vicious cycle.
The past few years have been all about layoffs. Social media has been flooded with horror stories about employees losing their jobs out of the blue. The IT industry has already laid off 124,000+ workers in 2024.
In August of this year, Intel announced a 15% reduction in its workforce, cutting ties with around 15,000 employees across the board. Days later, Cisco let go of 7% of its employees after already having laid off 4,000 workers earlier in the year.
The impact of these layoffs is both—global and personal. Not only do the employees suffer, but it’s also affecting the overall job market, with workers feeling uncertain about the industrial conditions.
The wave of mass layoffs raises critical questions about the job market in the IT industry. Will the increasing competition sabotage the stability of workers? Should employees be concerned about their jobs in a fluctuating market?
To this end, companies need to come up with better, more reliable ways to support their employees amidst the uncertainties. While the tech industry has been renowned for its innovation and growth over the years, it’s facing a challenging period of fluctuations. It’s important for workers and employers to stick together and persevere through it all.