Samsung is reportedly cutting 10% of its workforce to cut costs

Samsung is currently the undisputed king of the smartphone market, but Apple’s seemingly unstoppable growth and the burgeoning smartphone makers coming out of China are really starting to take their toll on the South Korean company. Not even the Galaxy S6 and Galaxy S6 Edge were able to sell as well as competing devices from Samsung’s American and Chinese rivals, especially in China, which is one the most important smartphone markets in the world at the moment. In order to combat its lackluster sales and cut costs, the company is reportedly going to cut a whopping 10% of its workforce at its headquarters in Seoul, which is equal to about 10,000 workers. 

Samsung Electronics Co. is preparing to cut 10 percent of workers at its headquarters, according to a Korean newspaper, as the world’s biggest smartphone maker loses sales to Apple Inc. and Chinese vendors. Samsung is targeting workers in the human resources, public relations and finance departments, Korea Economic Daily reported Tuesday, citing people it didn’t identify. The Suwon, South Korea-based company also plans to cut some expenses next year, the report added. Samsung declined to comment in an e-mail. The moves come after new high-end Galaxy smartphones failed to impress consumers, triggering five straight monthly declines and wiping out more than $40 billion in Samsung’s market value since April. The company’s share of global smartphone shipments fell more than 3 percentage points in the second quarter, and it’s no longer the top seller in China, the world’s biggest mobile-phone market. “Cutting jobs is the easiest way to control costs and Samsung’s spending on mobile business could also be more tightly controlled,” said Chung Chang Won, an analyst at Nomura Holdings Inc. in Seoul. “Samsung’s preparing to tighten its belt as it isn’t likely see rapid profit growth in the years to come.” The company had a total of 98,999 employees at its headquarters as of June 30, according to a regulatory filing.