Samsung on Tuesday issued a statement that it is committed to India and continues to invest significantly across its businesses, amid reports that it is downsizing its staff.
“We have demonstrated our commitment by building the World's Largest Mobile Factory in Noida, investing in local R&D and we are exploring new businesses such as 5G Network, among others. In the past one year, we have generated 2,000 new jobs at Samsung. Samsung India’s business continues to grow and expand, hence we will hire more talent across businesses through the year. As we contribute to job creation, we continuously realign resources as per business priorities to make our business more robust and efficient for long term success. As regards to business, with new products across categories, we have been able to consolidate our market share further, and we are confident of another record year," said Samsung.
However, Samsung had it very good in the Indian market for a fairly long duration. It was the largest seller of TVs and other appliances in the country and when it came to mobile phones too, the South Korean company had the highest market share. All that is now changing and changing very fast. Samsung is no longer the No.1 in the mobile phones market, Xiaomi is. In the television segment too, though Samsung still sells more TVs, in the smart TV segment, Xiaomi has overtaken it.
All these are telling on the company’s working and the latest information emerging from the company’s Indian operations, though not officially, is that they may resort to downsizing the headcount in the country across functions. The number being floated is around 1,000 out of approximately 20,000 that Samsung employs in India.
Severe competition on a sustained basis has meant compromising on the prices and offering discounts. This has a direct impact on the overall profitability of the Indian operations as a separate profit-centre. This is the main reason being cited for the company’s decision to show the door to personnel at various levels in the company.
The sources disclosing these developments say the opportunity is being utilised by the local management in Samsung India to identify the laggards among the employees and issue them the marching orders. Each division has consolidated such a list of personnel whose performance has been below par or have other issues and forwarded to the management, and the process of easing out these personnel may be set in motion and completed by October this year. Sales, marketing, R&D, manufacturing and support functions such as finance, human resources and corporate relations are all areas from where these 1000-odd employees to be fired, will come from.
Samsung is also at pains to point out that it is committed to the Indian market fully and its investments will continue as before. Where required, like in the 5G service rollout, there will be fresh recruitments as well.
Some of the other decisions the South Korean giant has taken to arrest the slide in its market share is to look at new models in Samsung Galaxy M series and A series exclusively focused on the Indian market and this has yielded positive results for the company.
The other area where Samsung seems to have missed the bus is the online sale of its devices both in the smartphone segment as well as in televisions. The Chinese firms have done a far better job there. The Korean major may be doing some course corrections there to regain market share.