Samsung must cut 10% of its workforce, and it’s iPhone’s fault


Poor old Samsung can’t catch a break. Photo: Kārlis Dambrāns/Flickr CC

Samsung has been taking a beating from Apple as of late, and apparently it’s taking its toll.

According to a new report, Samsung is responding to its diminishing smartphone sales not by fixing the root problem of its lack of originality and low quality reputation, but rather by sacking 10 percent of its workforce instead.

The South Korean tech giant will claw back some of its lost income by firing close to 10,000 workers — mainly in the company’s human resources, PR and finance departments, as well as by cutting expenses during fiscal 2016.

“Cutting jobs is the easiest way to control costs and Samsung’s spending on mobile business could also be more tightly controlled,” said Chung Chang Won, an analyst at Seoul’s Nomura Holdings. “Samsung’s preparing to tighten its belt as it isn’t likely see rapid profit growth in the years to come.”

The slowing smartphone market in China is hitting many manufacturers hard, but perhaps none so much as Samsung. In addition to losing its no. 1 smartphone vendor spot in China, it is continuing to fall prey to the uber-successful iPhones at the top end of the market, and low-cost brands like Xiaomi at the bottom end.

Samsung’s global share of smartphone shipments fell by more than 3 percent in the June quarter, and there’s little evidence that things will turn around any time soon.

Meanwhile, Apple is just one day away from unveiling its brand new iPhone 6s and 6s Plus — which, if you believe reports, Apple has ordered more of than any other iPhone in history.

Better tuck in Samsung. It could be a long, cold winter.

Source: Bloomberg