Sony, Samsung lay off 150 employees each in India
Sony Corporation and Samsung Electronics have each laid off about 150 executives in India in the wake of slowing sales in the country in the past two months and increased competition from Chinese companies that’s eating away at their smartphone market shares.
Sony India has offered voluntary retirement to its entire smartphone team as the Japanese company scales down its mobile handset business, while Samsung India, the largest seller of mobile phones in the country, has asked mid-level executives across marketing support and after-sales at its regional offices to leave in a bid to cut costs, said four senior industry executives, requesting anonymity.
Sony India failed to grow the way it had anticipated in the smartphone business after the parent company’s exit from entry-level models, stiff competition in the mid-to-premium segment from Apple, Samsung and Chinese brands and overall slowdown in sales. Sony India’s share in the smartphone market declined to 1% from 6-7% two years ago, according to independent reports.
Sony India is now scaling back the mobile business infrastructure it had created across channels and regions, which has led to the job cuts. The maker of Xperia smartphones will now focus on the upper mid-segment to premium-end market and plans to sell online through its exclusive stores and selected large retailers.
“The mobile business will be asset-light in Sony India and the television team will handle the business. The company is pulling back stocks from multi-brand stores and compensating dealers,” an executive said.
A Sony India spokesperson confirmed the company has offered VRS to an unspecified number of permanent employees in the mobile division in order to optimise resources following a shift in strategy to focus on the premium segment rather than chase sales volumes at the low-end. Sony will “focus on building a stable business foundation in this region going forward by streamlining our operations and seeking increased efficiencies,” the spokesperson said, adding that consumers will continue to have good and easy access to its products.
Samsung, which sells the Galaxy S6 edge+ smartphone and the Galaxy Note 5 device, had sacked some 250 employees before Diwali and has now cut down the multiple layers it had created in marketing and sales support, which were specific to each channel.
“Some employees have been offered a golden handshake package in compensation, while several have been just asked to go, citing audit reasons like minor inflation in travel bills,” one of the executives said.
A senior trade partner said Samsung India president HC Hong had informed dealers at the recent Consumer Electronics Show in Las Vegas about the company’s lower-than-expected growth in 2015 and cost-cutting measures, including reducing employee count.
A Samsung Southwest Asia spokesperson said the information on the layoffs is incorrect. “We have made no such organisational changes in December or January,” the spokesperson said. A senior industry executive said some of the recent exits are part of the process that Samsung had started in October.