Samsung to layoff employees amid falling sales, rising competition in India

Samsung is cutting jobs in its Indian unit, following a disappointing sales performance

Samsung is cutting jobs in its Indian unit, following a disappointing sales performance that has led to a significant decline in the company’s value and volume market share --these have hit the lowest levels in a decade--according to people familiar with the matter who spoke to Moneycontrol.

Sources said the company is laying off employees across functions such as sales, marketing and operations. One person familiar with the matter said the job losses could be in “high single digits”. Others cited higher numbers.

“The numbers could go as high as 30 percent of the Indian workforce,” one of the people cited told Moneycontrol.

Another person said that a restructuring is currently ongoing across the smartphone, consumer electronics, and home appliances businesses, which would result in the exits of some key executives from the company.

He said that Samsung has currently stopped fresh hiring and roles where executives have voluntarily exited are not getting hired.

Samsung may also reduce the off-roll employee count.

This comes as the workers in its Chennai manufacturing factory are on an indefinite strike for the third day on Wednesday, impacting production of televisions, refrigerators, and washing machines just ahead of the crucial festive season.

According to the cited source, Samsung’s management recently summoned the Indian team to South Korea to discuss the ongoing issues and restructuring efforts.

Samsung's struggles have been compounded by aggressive competition from brands like Xiaomi and Vivo, as well as conflicts with offline retailers and the departure of key sales and marketing executives.

Over the past few quarters, Samsung has lost up to 30 senior executives in retail, marketing, and business development roles, with many moving to its chief competitor, Xiaomi. Sources added that more executives in these functions may also leave the company in coming days.

Ongoing issues with offline retailers include differential pricing between online and large-format stores, lower margins compared to Chinese competitors, and uncertainty about the in-stock availability of popular models. These problems remain unresolved.

The All-India Mobile Retailer Association (AIMRA) recently sent multiple letters to Samsung's President and CEO of South-West Asia, JB Park, and Corporate Executive Vice President of Mobile Division, Soon Choi. The letters demanded increased margins, consistent pricing, parity across channels, withdrawal of selective upgrades, better sales support, or price reductions to ease business operations. These unresolved issues have led to an inventory build-up ahead of the festive season.

Samsung regained its position as the top smartphone brand in India in 2023 after overtaking Xiaomi in the December quarter of 2022. However, according to market research firms IDC, Counterpoint, and Canalys, Samsung fell to third place in volume in the April-June quarter of 2024. During this period, Samsung's smartphone shipments decreased by 15.4 percent, marking its third consecutive quarterly decline, with its volume market share dropping to 12.9 percent.

This decline also impacted its value market share, which fell to 16 percent from 23 percent in the previous quarter and 21 percent a year earlier, according to IDC data obtained by Moneycontrol.