Cost cutting? Samsung is reportedly laying off 1,000 employees in India

Korean giant Samsung is reportedly laying off 1,000 employees in India as part of a cost rationalisation programme. The consumer electronics major has been forced to slash prices of smatphones and televisions as it competes with Chinese rivals in India.

According to a report in Economic Times, Samsung has 20,000 employees in India and several under-performers and those not delivering targeted results in their teams, have already been asked to leave. The ET report said manpower rationalisation exercise will encompass sales, marketing, R&D and manufacturing, as well as support functions such as finance, human resources and corporate relations. The job cuts have been endorsed by Samsung’s headquarters in Seoul, with the focus now more on generating profit growth — rather than revenue — from India.

In 2018, worldwide shipments of smartphones declined 4.1% to 1.4 billion units, according to market information provider IDC. Shipments by Samsung dropped 8% to 292 million units, although the company remained the largest smartphone vendor in the world.

Samsung India, is going full throttle to overtake market leader (by volume) Xiaomi in the smartphones segment, and has charted a new growth strategy for the purpose. It has even dropped prices for smartphones and televisions by 25-40% since end-2017 to compete with price-aggressive Chinese rivals like Xiaomi, OnePlus, Vivo, TCL and Realme.

The plan, encompassing online presence, product features and positioning, has been chalked out in line with the overarching guidelines from its global management.

The new strategy by Samsung, adopted two months ago, aims to revamp presence in e-commerce channels that generate over 35 per cent of sales in the industry. To boost sales in the channel, where Samsung trailed Xiaomi for years now, the Korean major has introduced an all new online-only M series of smartphones. As a result, analyst firm IDC noted, Samsung’s share improved to 13.5 per cent in the January-March quarter. However, Xiaomi continued to lead with 48.6 per cent share.

To counter Xiaomi’s ever-growing clout in the entry and mid-segment, Samsung has placed its Galaxy A series at the forefront. The revamped A series, unlike its previous avatar, now covers a wide price range – from below Rs 6,000 to Rs 28,000. What has also changed is Samsung’s approach towards the price segment. In line with the vision of DJ Koh, its global president for information technology and mobile communications division, the local unit is now focusing on bringing in innovations in the mid-segment – unlike its earlier approach of introducing them at the top of the pyramid.