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Samsung is cutting thousands of jobs globally as it struggles to compete in the AI market.
Samsung is cutting thousands of jobs globally.
As part of a larger strategy to shrink its worldwide staff, Samsung Electronics Co. is allegedly laying off employees in Southeast Asia, Australia, and New Zealand reported by Bloomberg. Ten percent of the workforce in these locations may be impacted by the layoffs, however the precise figures will depend on the subsidiary. This is a part of Samsung’s continuous attempt, according to people familiar with the situation, to simplify operations and better manage its workers in the face of difficult market conditions. At present, the organisation has about 267,800 workers globally, of whom over 147,000 are based outside of South Korea.
The layoffs coincide with Samsung’s challenges in important industries, namely the memory chip industry pushed by AI. The South Korean IT giant has already made cuts in other areas, such as ten percent in India and other parts of Latin America, but it does not have any plans to lay off employees in its home market. It is expected that the organisation would concentrate on cutting support and leadership roles while maintaining manufacturing jobs.
Challenges in AI Memory Chip Market
Samsung’s stock has dropped by more than twenty percent this year, reflecting the company’s declining performance. In the critical field of AI memory chips, the business has not kept up with its competitors. When combined with Nvidia Corp.’s AI accelerators, high-bandwidth memory (HBM) chips are essential for training artificial intelligence (AI) models. A competing South Korean company, SK Hynix, has gained the lead in manufacturing HBM chips. Samsung is now having to play catch-up in a market that it used to dominate.
The business has also had difficulties in the highly competitive custom chip manufacturing market, where Taiwan Semiconductor Manufacturing Co. (TSMC) is a dominant player. Recently, Samsung appointed Jun Young-hyun to take over as president of its chip business. In her new role, she admitted that the corporation had to alter its work culture to prevent getting caught in a “vicious cycle.”
Focus on Workers Issues and Leadership
As the business navigates these difficulties, Samsung is going through a key period of leadership transitions. It is now the responsibility of Executive Chairman Jay Y. Lee, who assumed the role following his acquittal on charges of stock manipulation earlier this year, to direct the business through this challenging time.
Apart from facing layoffs worldwide, Samsung has also had internal conflicts within South Korea. In May, the company’s first-ever strike was called by the largest of its unions, indicating rising tensions between the internet behemoth and its domestic workers. But Samsung is still dedicated to making changes to its operations in order to boost productivity and reclaim its competitive advantage in the changing technology sector.
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