Samsung to lay off 10% of its workforce in India amid a factory strike crisis

Update: Reuters reports that this may be part of a worldwide plan for reducing the Samsung's workforce by up to 30%. South Korea-based HQ has instructed subsidiaries worldwide to reduce sales and marketing staff by about 15% and the administrative staff by up to 30%, Reuters sources claim.

Samsung India is experiencing a turbulent period as it is losing ground to Chinese competitors. According to The Economic Times of India, the company will lay off nearly 200 people, which is about 10% of the workforce.

The announcement comes on the third day of protests at the Chennai factory, where workers demand better wages and working conditions.

The plant, located in Sriperumbudur, produces TVs, fridges and washing machines and contributes between 20% and 30% of Samsung's annual $12 billion revenue in India. The factory does not manufacture mobile devices, so this strike will not affect smartphone production.

Reuters reported that JB Park, CEO of Samsung Southwest Asia, traveled to the factory to try and resolve the protest. The strike itself might not affect smartphone production but temoving 200 people might affect the smartphone business in general, as it would definitelty lead to some reshuffling in Samsung India's top levels.

People being laid off are offered three months of salary as per their contract plus a severance package of a one-month salary for every year of service. The salaries are currently way above market average, which has necessitated a course correction since business has slowed down.

Full details about the layoffs are expected to be revealed after the Hindu festival of lights, Diwali, which falls on October 31 this year.

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