Amid a slowdown in its business, electronics giant Samsung India is planning to lay off 200 employees in its Indian business. Poor consumer demand has reportedly reduced the sales of the company. To add to it, the company is also losing its market share in its smartphone sector, as per an Economic Times report.
Around 9–10 percent of the managerial workforce of the company will be reportedly affected due to the layoff. It will happen across sectors such as mobile phones, consumer electronics, support functions and home appliances.
Amid the overall slowdown in its business, the company has decided to put a halt on fresh hiring for now. Further, as per the Economic Times report, Samsung India might also reduce the count of off-role employees.
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As a part of the employment contract, those who are being fired are being reportedly offered three months' salary. Additionally, the company is also offering a one-month pay severance package for each year of employment in the organisation, adds the report.
More Layoffs Ahead
Speaking to the Economic Times, a senior executive of the company said that when the company was doing well, the salary of the mid- and junior-level executives in the company had doubled. As a result, this “course correction” was needed since the business is not performing well. Additionally, the push from Seol to reduce the cost incurred for the India operation triggered the move. The executive told the newspapers, “The layoff process has started and may increase after Diwali if the company is not able to get a substantial share of the sales.”
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This is coming at a time when the India operation of Samsung India has seen several senior-level exits. Samsung India’s senior director and head of sales, operations and planning, Kunal Aggarwal, and Mohandeep Singh, SVP, mobile business, Samsung India, are some of the big names who left the company. Media reports suggest that several senior executives who left Samsung moved to Xiaomi, a competitor of Samsung.
Samsung Workers Strike
The layoffs in Samsung are happening at a time when workers from Samsung’s Sriperumbudur unit in Tamil Nadu are striking for a better wage. Hundreds of workers have participated in the strike in company uniforms, and they claim that this is an indefinite strike.
Speaking to Reuters, a worker said, “If they (Samsung) had given us a living wage and treated us with respect, we wouldn't have thought of joining a union.”
Along with better wages, the workers are also demanding that their newly formed union be recognised. In terms of wage, the workers want their wage to increase from Rs 25,000 to Rs 38,000. Additionally, media reports indicate that the workers want their allowance to increase from Rs 150 to Rs 250.
Meanwhile, as per The Hindu, a spokesperson of Samsung said, “At Samsung India, the welfare of our employees is our top priority. We actively engage with our workers to address any grievances they may have and comply with all laws and regulations. We will also ensure that there is no disruption to our consumers.”
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