Home Samsung is downsizing its workforce to deal with a global economic downturn

Samsung is downsizing its workforce to deal with a global economic downturn

In what could be termed as a recession period for Samsung, the firm has seen a decline in the of employees from 99,382 at the end of 2014 to 96,902 at the end of 2015. This downfall in 2015 is a first for Samsung, having a constant growth in the number of employees since 2008. The number of R&D centers also came down from 44 to 41 as on Q3, 2015. This was a result of merging two R&Ds in the U.S and the shutting down of Electronic Materials Research Center and Information Application Research Center and also saw a decline in investment in R&D for the first time since 1998. However, Samsung still ranked second globally for investing a total of $14.1 billion for R&D.
Samsung has also started accepting voluntary retirement from its employees. A lot of jobs have been cut in multiple wings of Samsung’s business. Over 1000 employees and executives had to leave Samsung SDI. Samsung Heavy Industries had to let go of 29 employees between the end of 2014 to 2015. The employee number also went down in almost every other wing with a decline in 700,214, 141, 56, 51 and 28 employees in Samsung Engineering,Samsung SDS, Samsung Card, Samsung Securities, Samsung Life Insurance and Cheil Worldwide. Cheil Worldwide, Samsung’s advertising unit is also in talks of being sold off by the company very soon.
Opinions from Industry experts is that, Samsung is taking a precautionary move by cutting down its workforce to deal with a future global economy downfall and the constant change in market environment that could possibly see opening up new opportunities at the cost of shutting down current gen technologies. Samsung’s recent involvements in newer technologies like biotechnology, automotive application component, virtual reality (in partnership with Oculus), Samsung Pay and electric vehicle battery are all examples of what could possibly a major venture in the future for Samsung to regain its profit margin.

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