According to The Economic Times of India, Samsung India is experiencing a difficult time. The firm is expected to lay off about 10% of its staff, or about 200 people. This action coincides with growing Chinese manufacturer rivalry and continuous demonstrations at one of its main plants in Chennai.
On its third day, the walkout at the Sriperumbudur factory consists of workers demanding improved working conditions and more pay. Comprising 20% to 30% of Samsung’s $12 billion yearly income in India, the plant produces a variety of goods like TVs, refrigerators, and washing machines, thereby greatly contributing to Samsung’s annual revenue in that nation. Although this factory does not generate cellphones, the demonstrations and layoffs will likely affect Samsung India’s operations, resulting in changes in management and organizational structure.
Reuters notes that this staff cut might result from Samsung’s worldwide downsizing strategy. According to sources, the headquarters of the corporation in South Korea has directed subsidiaries all over to eliminate administrative staff by up to 30% and sales and marketing personnel by 15%. Samsung might cut its staff globally by as much as 30%.
To try to fix things, JB Park, CEO of Samsung India, has allegedly visited the Chennai plant. Although the strike has no direct effect on smartphone output, the layoffs could cause internal rearranging with wider effects for Samsung’s operations in India.
As per their contract, employees being let off are being given a severance package of three months of income combined with an extra month of compensation for every year of employment. Though current pay packages are substantially above the industry average, Samsung’s plan to reduce positions comes as the firm attempts to turn around deteriorating revenue.
After Diwali, the Hindu celebration of lights, which falls on October 31 this year, more specifics about the layoffs should be revealed.
