Samsung May Fire 1000 Indian Employees; Low Online Sales, Low Profits Are The Reasons?
Samsung has strongly refuted these media reports, and have termed them as misleading. Infact, they hired 2000 employees last year alone.
Here is the official statement from Samsung, regarding this news:
“Today’s article about Samsung in a section of the media is misleading.
Samsung is committed to India and continues to invest significantly across its businesses. We have demonstrated our commitment by building the World’s Largest Mobile Factory in Noida, investing in local R&D and we are exploring new businesses such as 5G Network, among others. In the past one year, we have generated 2,000 new jobs at Samsung. Samsung India’s business continues to grow and expand, hence we will hire more talent across businesses through the year. As we contribute to job creation, we continuously realign resources as per business priorities to make our business more robust and efficient for long term success.
As regards to business, with new products across categories, we have been able to consolidate our market share further, and we are confident of another record year.”
Business conglomerate Samsung has decided to terminate 1000 employees in India, as they are looking to cut costs across the company.
The defeat of Samsung against smartphone brands like Xiaomi and OnePlus in online sales, along with a severe dip in profits have been termed as the main reasons for this terminations.
1000 Employees To Be Terminated In India
Samsung has confirmed that they are firing 1000 employees in India, as part of ‘cost rationalisation programme’.
Infact, the layoffs have already started, and 150-odd employees from the telecom networks division have been asked to leave.
As of now, Samsung is India’s largest maker of consumer electronics and smartphones, by volume.
Samsung spokesperson said, “As we grow, our efforts are leading to more job creation. At the same time, we continue to make our business more efficient and robust for long-term success.”
At the same time, Samsung has committed to making 2019 a record year for the company, as they are all set to launch newer products, across various categories.
The spokesperson further said, “As regards business, with new products across categories, we have been able to consolidate our market share further, and 2019 will be a record year for the company,”
Samsung employs more than 20,000 employees in India, as per industry estimates.
The Reason For Layoffs: Slow Online Sales, Decreasing Profits
As per the report by Economic Times, two main reasons have been attributed for this decision by Samsung to terminate 1000 employees and to induce more cost-cutting measures: Slow online sales, and decreasing profits.
If we talk about online sales, then the company has lagged behind brands like Xiaomi and OnePlus by a huge margin.
In India, 40% of overall sale of smartphones and 30% of televisions happen online, and if a company like Samsung failed to leverage this boom, then there have to be consequences.
While 43% market of online sale of smartphones has been grabbed by Xiaomi, Samsung accounts for only 15% of sales.
The same trend is being reflected in the sale of smart TVs as well. Although Samsung is the #1 player in terms of overall TV sales, Xiaomi captured 39% market share in the smart TV market, in the January to March quarter, whereas Samsung managed a meager 12% share.
And this lackluster online sales is directly impacting the bottomline of the company, and forcing them to reduce prices of their products, which means lower profits.
Since 2017, Samsung has dropped prices of smartphones and televisions by 25-40%, which has mainly happened in order to compete against rival Chinese brands such as Xiaomi, OnePlus, Vivo, TCL and Realme.
The maximum price cut has been reported for Galaxy M Series and the Super6 Series of ultra-HD smart TVs, which were recently launched.
We will keep you updated, as we receive more updates.