In one of the most ambiguous rebuttals of recent memory, Samsung has denied reports claiming it is looking to reduce its workforce by 10%. It’s not reducing its workforce, it says, but “relocating” them. One of Samsung’s high-ranking officials spoke to Yonhap News, claiming that it will “only be relocating workers”, denying rumors that it was looking to move on 10 percent of its management staff in sales and PR. What it didn’t say was what “relocating” actually means, leaving us speculating a number of possible translations for the phrase…
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It could, for instance, be telling staff that if they want to remain Samsung employees that they move to another city, and maybe take a demotion. It could be a position relocation, or geographical relocation, or both. Pure speculation, but it wouldn’t be either surprising or new. It has also been reported that Samsung is persuading some employees to retire early, technically not making them redundant– disguising the true scale of any redundancies.
Samsung makes some of the best smartphones on the market currently, with its latest Galaxy Note 5 drawing rave reviews from anyone who uses it, even those who maybe didn’t like Notes before. But great reviews don’t make for financial success. The company has seen its market share chipped away by more disruptive brands releasing powerful, well-specced phones for a fraction of the price of Sammy’s devices. In Q2 alone, Samsung saw a huge drop of 37.5% in operating income of its smartphone business due to the challenge at the low end from cheap Android OEMs, and at the high end from Apple.
Where Samsung goes from here is yet to be seen. Reports of mass lay-offs don’t normally come unless there’s at least a hint of it actually happening. Either Samsung really isn’t firing people, or it is finding ways to make it seem like it isn’t while hundreds (maybe thousands) still end up without positions at the Korean tech company’s offices. Whatever it does, Samsung needs to find a way to return to its former successes in the smartphone market.