Samsung India Reduces Workforce Amid Rising Chip Prices and Declining Smartphone Sales
Samsung India Electronics has begun a phased layoff of its workforce as its smartphone business faces declining sales and margins due to rising memory chip prices. Reports indicate that around 80-100 executives from the television and home appliance divisions have been let go, including director-level officials and team leads at the company’s headquarters. An insider revealed that up to 25% of the sales and marketing workforce in the electronics sector could be impacted.
Termination Letters Issued
The domestic electronics sales organization employs approximately 550-600 executives, in addition to a larger workforce handling smartphones. Affected employees have reported receiving termination letters in small batches over recent days, with many being asked to leave without serving their notice periods. As part of the severance package, Samsung is offering three months’ salary along with an additional month’s pay for each year of service.
Rupee Depreciation Pinches
The company’s challenges have been compounded by a nearly 10% decline in the rupee through FY26, although the currency has stabilized in the current fiscal year. The weaker rupee has increased the prices of Samsung’s smartphones and other electronic products, impacting sales growth. Industry estimates suggest that smartphone volumes in India have dropped by 11-12% year-on-year. Mobile phones account for about three-fourths of Samsung India’s local revenue, while the company has struggled to gain traction in India’s high-value air-conditioner market.
Samsung is also restructuring its branch network as part of cost-cutting measures, merging several offices, which has rendered some positions redundant.
No Layoffs in Smartphones Team for Now
The absence of a semiconductor business in India is affecting Samsung’s local operations. Currently, the smartphone division has not experienced layoffs, as it remains the company’s largest business in India. A recovery in smartphone sales could significantly influence Samsung’s financial performance in the country. The Galaxy Fold and Flip series have received positive feedback, although premium phones priced at Rs 1 lakh and above represent only 4% of the overall market by volume.
Despite these challenges, Samsung India’s total revenue reached Rs 1.1 lakh crore in FY25, marking a 12% increase from the previous year. The company’s net profit for FY25 was Rs 11,287 crore, up 38% from the prior fiscal year. However, Samsung’s global mobile business reported an operating loss in the June quarter, and its consumer electronics operations remain under pressure.
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