IA “FACT” already wrote about the trend towards displacement by artificial intelligence and mass reduction by large companies of “white-collar workers” who work on outsourcing abroad.
Recently, mass layoffs in large companies have become a regularity, caused by changes in macroeconomic conditions and the rapid development of technologies, in particular artificial intelligence. Companies are trying to optimize their costs, increase efficiency and adapt to the new realities of the market, where automation and artificial intelligence play an increasingly important role.
In addition to Microsoft, which cut 10,000 jobs, giants such as IBM, Cisco, Qualcomm and consulting firm PwC also made similar moves, which also felt the impact of macroeconomic changes and increasing demands for optimization. Thousands of workers around the world, including white-collar outsourcers, have been forced out of their jobs as companies cut costs and switch to AI technologies. PwC, which provides consulting services to global companies, also announced significant cuts, in part due to the optimization of business processes using new technologies such as analytical platforms based on artificial intelligence. This reduces the need for a large number of employees for data processing and consulting.
Today, companies are increasingly implementing automation in customer support, accounting, data management, and even software development processes. This process displaces outsourced workers who previously performed these tasks.
Such global cuts are not only due to the rise of AI and automation, but also to changing customer priorities. In particular, the demand for new digital solutions forces companies to shift their resources from traditional customer service processes to the development of innovative products and technologies. The labor market, especially in the field of outsourcing services, is undergoing a significant transformation that may change both the structure of the workforce and global economic trends in the near future.
Today we will talk about a new wave of mass layoffs initiated by the South Asian giant Samsung Electronics Co. By in words Samsung is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to cut thousands of jobs worldwide, according to sources familiar with the situation. This is part of the company’s global strategy to optimize operational efficiency amid growing competition in the market for artificial intelligence and memory chips. This helps the company reduce costs and focus on key areas of development.
The layoffs could affect one in ten white-collar workers in these markets, although the numbers for each subsidiary may vary. According to the latest report on sustainable development, the total number of employees of the world’s leading electronics and technology manufacturer is about 268,000 employees, more than half of them – about 147,000 – work abroad. In Singapore, employees have already been informed of the cuts in private meetings with managers.
The layoffs will not affect South Korea’s domestic market, which employs more than 120,000 workers. Samsung also plans to keep manufacturing jobs, so the company’s factories abroad will likely continue to operate. The main cuts are in management and support functions, not production lines. This means that production capacity remains unchanged to ensure continuity of production and to meet demand for products.
These factors combine to create a difficult situation for Samsung, which is forced to balance the need for innovation with cost optimization.
The main prerequisites for the restructuring of Samsung
The main reasons for future reductions are, first of all, competition in the market of memory chips and smartphones. Samsung has a wide range of its own products: smartphones, TVs, household appliances and other gadgets. However, the production of memory chips is one of the most profitable segments for Samsung. The demand for these chips is constantly increasing due to the development of artificial intelligence, the Internet of Things and cloud computing. Memory chips are indispensable components for many gadgets, including Samsung’s own models.
It’s worth mentioning that Samsung shares have fallen by more than 20% this year, forcing the company to take measures to maintain financial stability. Samsung is in a difficult position in the memory chip market, especially due to strong competition from SK Hynix and Taiwan Semiconductor Manufacturing Co. SK Hynix is a leading manufacturer of high-bandwidth memory chips used in Nvidia’s AI accelerators. Taiwan Semiconductor Manufacturing Co, in turn, has a market advantage in custom-made chips for external customers. This allows them to provide high-performance solutions for training artificial intelligence models, which is critical for today’s technologies.
This year, Samsung abruptly changed the head of its chip business. The new manager warned that the company must change its workplace culture to avoid a “vicious circle” of constant problems and losses. This internal restructuring is designed to improve the company’s efficiency and allow it to better adapt to changing market conditions, as increasing competition and technological challenges place new demands on Samsung. As a result, the company is forced to change business approaches, optimize the cost structure and improve internal processes in order to remain competitive in the era of digital innovation.
Possible consequences of personnel cuts for the future of Samsung
Reducing management and support functions can help a company reduce costs and improve operational efficiency. At the same time, the preservation of manufacturing jobs shows that Samsung is committed to maintaining its production capacity and meeting demand for its products.
These measures are a natural attempt to adapt to changes in the market, in the conditions of competition in the field of artificial intelligence and other technologies.
Of course, conflicts with employees and strikes can negatively affect the morale of workers, which can affect their productivity. Samsung has already faced conflicts with its employees in South Korea. The company’s largest union announced its first strike in May.
However, these changes are likely to help the venerable South Asian giant remain a competitive company, while requiring efforts to maintain a positive work environment.
It’s worth noting that the memory chip market is notoriously cyclical, meaning periodic ups and downs in demand. Samsung has already reduced its workforce in the past to adapt to these changes. This allows the company to remain competitive, but at the same time, unfortunately, creates instability for employees.
Samsung’s massive layoffs signal deep structural changes at the company amid growing competition in the artificial intelligence and memory chip markets. Focusing on reducing costs and increasing efficiency, the company is trying to adapt to new challenges while maintaining its production capacity. However, these measures can negatively affect employee morale and lead to possible conflicts within the company. Despite this, Samsung’s global restructuring is necessary to remain competitive in a rapidly changing technological environment.
Tatyana Morarash
