New Samsung Layoffs in the U.S. Show Smartphone Arm’s Struggles, Even as It Profits Massively From AI

A round of layoffs just hit Samsung’s operation in the U.S. In addition to the obvious human dimension as people lose their livelihoods, it’s spotlights a tough reality for Samsung: its consumer tech arm is struggling even as its chip and memory business goes stratospheric. A report from Reuters places the number of layoffs at about 839. Samsung confirmed to Reuters that 739 people were being fired in Englewood Cliffs, New Jersey, and about 100 others were let go in Plano, Texas according to anonymous sources who spoke to Reuters. Apparently Samsung clarified to Reuters that the majority of those losing their jobs had been given “relocation offers.” These are jobs at Samsung’s “display, phone and other consumer electronics operations,” according to Reuters. Roles mentioned on the Reuters article are sales and marketing—not the sort of blue collar jobs that typically unionize in the U.S. A 2019 report from Hankyoreh found a great deal of intense anti-union activity from Samsung executives around the world, seemingly as a matter of global corporate policy. “Even the smallest examples of collective action were met with reprisals,” the report said. Earlier this month, Samsung reported a 19-fold quarterly jump in profits as demand for memory and chips for the data center build out has flooded Samsung with revenue. It’s a very different picture in South Korea, where the chip and memory business is centered, and where workers seem to have leverage lately. Organized Samsung workers authorized a strike, and in May, under maximum pressure to keep its memory business operating smoothly, Samsung agreed to massive deals for workers, including bonuses to the tune of $400,000. The AI boom, and accompanying spike in the cost of components, has been a mixed blessing for Samsung on the whole. This spring, reports indicated that executives were sweating profit projections showing the company’s first failure to turn a profit on smartphones ever.