Samsung India Electronics has started laying off its workforce in phases as its core smartphone business faces pressure on sales and margins following a more than twofold increase in memory chip prices. Around 80-100 executives in the television and home appliance businesses have so far been asked to leave, according to reports.Those affected include director-level officials and team leads at the company’s headquarters, as well as branch and area managers working across its operating branches, according to the executives.“Up to 25% of its sales and marketing workforce in the electronics business — including offroll employees hired through manpower agencies — could be affected,” one executive told ET on the condition of anonymity.
Termination letters issued
The domestic electronics sales organisation has around 550-600 executives, in addition to the much larger sales workforce handling smartphones. One employee affected by the cuts told the financial daily that termination letters have been issued in small batches on a daily basis over the past few days, with employees being asked to leave without serving their notice periods.As part of the severance package, the company is offering three months’ salary, along with an additional month’s pay for every year of service.
Rupee depreciation pinches
The company’s difficulties have also been aggravated by the rupee’s nearly 10% decline through FY26, although the currency has remained largely stable during the current fiscal year after reaching a trough in May.The weaker rupee has pushed up the prices of Samsung’s smartphones and most of its other electronic products, putting pressure on sales growth. Sales and margin growth across the wider Indian electronics industry are also being affected this year.Industry estimates indicate that smartphone volumes in India have fallen 11-12% year-on-year.Mobile phones contribute around three-fourths of Samsung India’s local revenue. At the same time, the South Korean company has struggled to make headway in India’s high-value air-conditioner market despite stepping up its efforts this year. This has added to the pressure on its consumer electronics business, which is also dealing with a sharp rise in raw material costs.Samsung is also restructuring its branch network as part of its cost-cutting efforts. Several offices are being merged, with Ranchi and Patna, Delhi and Gurgaon, and Punjab and Chandigarh among the locations being combined. The move has made some positions redundant, according to industry executives.
No layoffs in smartphones team for now
The lack of a semiconductor business in India is being seen as a factor weighing on the performance and manpower outlook of Samsung’s local operations. Samsung’s semiconductor business has also made it one of only three Asian stocks with a trillion-dollar market capitalisation.For now, the smartphone division has been spared from the layoffs, the report said. It remains Samsung’s biggest business in India, and a recovery in smartphone sales could have a significant impact on the company’s overall financial performance in the country.The company’s latest super-premium smartphones, the Galaxy Fold and Flip series, have received a positive response, although phones priced at Rs 1 lakh and above account for only 4% of the overall market by volume.Samsung, however, lost ground in the broader domestic smartphone market during April-June, according to the latest data from market tracker Counterpoint Research. The company dropped to third place from second, with Vivo taking the top position and Oppo ranking second in a closely fought market.Counterpoint Research said Samsung has been using aggressive promotions across several key models.Samsung India’s total revenue reached Rs 1.1 lakh crore in FY25, a 12% increase from the previous year, according to its latest filings with the Registrar of Companies. Home appliances contributed 11% of sales, making the category the company’s second-largest after mobile phones.The company’s net profit for FY25 was Rs 11,287 crore, up 38% from the previous fiscal year. Financial results for FY26 are yet to be released.Samsung’s global mobile business also faced a setback in the June quarter, turning in an operating loss. Its consumer electronics operations continued to remain under pressure, even as strong demand for memory chips helped drive a sharp rise in semiconductor profits.“There’s manpower rationalisation in the home appliance and television businesses. The second round can happen after Diwali,” said one of the executives cited earlier.“There will be no immediate job cuts in the mobile phone business as this is its bread and butter and the company expects a rebound in sales during Diwali. However, it might get evaluated later.”Samsung raised prices of some smartphone models by 5-10% on Monday. This was the third price increase announced by the company this month.The All India Mobile Retailers’ Association has said repeated price hikes have led to a sharp 40% decline in consumer footfall.Samsung India has also pushed back a proposed merger of its home appliance and television sales teams to the December quarter. Industry executives said the move is expected to help cut costs and reduce management layers. One executive, however, said the proposed merger has been deferred.
About The Author
