Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000
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The remaining cuts in Amazon will bring the total number of redundancies to over 18,000 and will be implemented in the coming weeks. Samsung also has problems and suffers from a lack of demand for its products.
Samsung
Macroeconomic challenges hit Samsung hard last year as companies and consumers cut back on electronics spending after a shopping boom in the early stages of the pandemic.
Demand for tech will remain weak as high inflation, rising interest rates and a strong dollar weigh on sales. This led to a sharp decline in demand for goods from Samsung, the world's largest manufacturer of smartphones, televisions and semiconductors. The drop in demand is a constant challenge for Smanung.
According to analysts surveyed by data provider FactSet, Samsung's operating profit for the quarter ended December 31 was projected to be almost half as much as a year earlier.
Currently, Samsung leads the global smartphone market in terms of total shipments, but Apple dominates the premium smartphone market.
In recent years, Samsung has battled rival Apple to defend its share of the premium smartphone market, where most of the industry's profits are generated. Apple has created an exclusive ecosystem of connected products and services that helps attract new consumers and increase their retention.
Samsung plans to overcome current market challenges by strengthening the integration of connected devices and related software, an area where it has previously lagged behind rivals such as Apple Inc.
For now, Samsung smartphone users can set the washing machine to complete its cycle when they get home and turn on music on the Samsung TV, and the stereo speakers will automatically turn on to the beat of the music. The user can also scan the barcode on a package of frozen hot dogs with a smartphone, and Samsung's microwave oven will heat the product according to the instructions.
Samsung has created a new umbrella team made up of employees from each product unit to work to improve the user experience across multiple devices, said Han Jong-hee, vice president and general manager of the South Korean tech company. The team office includes rooms imitating real houses and other spaces where connected devices are tested and developed in many scenarios.
Since October 2021, Samung shares have skyrocketed significantly. After peaking at 88,800, it declined. The year 2022 was in a downward trend. This year, the company's shares started at 55,500 and began to grow. Currently, Samsung shares are trading at 58,200.
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Amazon
The Seattle-based company said in November it was starting layoffs, with the cuts focused on its appliance, recruitment and retail business.
More than 18,000 workers will be affected, the biggest cut recorded last year at a major tech company as the industry recoils amid economic uncertainty.
The layoffs are concentrated within the company's corporate ranks and account for about 5% of that portion of its workforce and 1.2% of its 1.5 million employees as of September.
Amazon was one of the biggest beneficiaries of the Covid-19 pandemic as customers flocked to shop online. The rush into Amazon's various businesses, from e-commerce to groceries and cloud computing, has accelerated the company's years of growth. To keep up with demand, Amazon doubled its logistics network and added hundreds of thousands of employees.
When demand began to wane and customers returned to in-store shopping, Amazon initiated an extensive cost-cutting review to cut back on units that were unprofitable. In the spring and summer, the company made targeted cuts to lower costs by closing physical stores and business units such as Amazon Care. Amazon later announced a company-wide hiring freeze before opting to lay off employees. Many tech companies cut jobs as the economy worsened.
Last time, ending 2022, Amazon shares were below 90. They ended the year at 84.18, and are now slightly up to 87.19.
Source: wsj.com, finance.yahoo.com
