Samsung India Is Struggling With Revenues; May Fire 1100 Employees In India
Revenues of Samsung India are falling, and such is the alarming situation that they are firing employees to reduce their expenses. As per media reports, Samsung may fire 5% of their staff in India within next few months; which translates to roughly 1100 employees.
Right now, Samsung India has 22,000 employees working in various departments which include Research and Development, Software programming and blue-collar jobs such as manufacturing and logistics.
As per reports, majority of this firing will happen in various mid-level managerial positions and blue-collar jobs in manufacturing. Atleast 5 officials from Samsung have confirmed this development, as declining sales and less revenues have been attributed to this firing exercise.
Reportedly, around 90 employees from Kolkata and New Delhi have been asked to resign; whereas 140-150 employees would be asked to quit post-Diwali. 35 of the fired employees were in the post of General Manager or higher. Four senior officials of Samsung have already shifted their base in the last couple of months – SK Sharma (taxation head), Rajinder Sharma, (legal head, moved to Flipkart), Sanjay Bali, (HR head) and Vipin Tuteja, (managed Printer business).
Between December to March, 900-1000 employees would be asked to quit, in a phased manner. Performance is the criteria which would be used to filter out employees. The report said that in case performance of these ‘targeted’ employees does improve, then the firing exercise may be halted.
All those who are being asked to quit are paid 3-6 months of salary as compensation. They have already reduced the appraisal and incentive programs inside the organization.
In a reply to email, Samsung India spokesperson has said, “Based on business needs, we do reorganize our workforce to deliver optimal value to our consumers and partners in the country. We care for the well-being of all our employees and we remain committed to employing talent for continuing growth in India.”
This new ‘restructuring process’ is being carried out under current Samsung India president and chief executive officer HC Hong; who was earlier managing Latin American operations. Last week, in a letter to all mid to senior level managers across all regional and branch offices, Hong had suggested that drastic measures would be undertaken to cut costs, improve efficiency and increase revenues of the company.
Samsung has already halved their projected growth for 2015-16 to 15-20%, which was in the range of 30-40% in the last 2 years. We will keep you updated as more details come in.
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