Samsung India faces economic struggles, laying off almost 200 employees, which is about 10% of its workforce, mainly due to increased competition from Chinese rivals.
Samsung India is facing a challenging period as it struggles to keep pace with Chinese competitors. The company is set to lay off nearly 200 employees, equivalent to around 10% of its workforce.
The announcement comes amidst ongoing protests at the Chennai factory, where workers are demanding better wages and working conditions. The strike, which is now in its third day, has seen workers gathered outside the factory gates, calling for improved pay and benefits.
The Sriperumbudur plant, which produces TVs, fridges, and washing machines, contributes between 20% and 30% to Samsung’s annual revenue in India, amounting to around $12 billion. However, the factory does not manufacture mobile devices, so the strike is not expected to affect smartphone production.
Samsung’s CEO, JB Park, has traveled to the factory to attempt to resolve the dispute. While the strike itself may not directly impact smartphone production, the layoffs could still have a ripple effect on the company’s top levels.
Those being laid off will receive a severance package, including three months’ salary as per their contract and a one-month salary for every year of service. The salaries being offered are reportedly above market average, but the company has deemed a course correction necessary due to slowing business.
More details about the layoffs are expected to be revealed after the Hindu festival of lights, Diwali, which falls on October 31 this year.
Source: Reuters • The Economic Times
