Samsung cuts workforce and looks to India

Samsung cuts workforce and looks to India

Cheaper labour and easier market access

Samsung has cut its workforce as the company expands production overseas.

The electronics giant reduced its staff in South Korea by 1,630 over the six months from March to September 2007, and has ramped up production in low-cost labour markets such as India.

Samsung has invested $130m in a TV manufacturing centre near Chennai in southern India, and will open a new factory this month with a capacity for 1.5 million TVs per year.

The company had 85,269 employees at the end of September, according to documents submitted to financial regulators. Samsung Electronics' workforce has almost doubled in size over the past five years.

Samsung is also looking at building a mobile phone plant in the same area, company officials told Korean press over the weekend.

"We have secured over 300,000 square metres of land in Chennai, which we believe is enough for the new plant," a Samsung official said on condition of anonymity.

"We will decide on either India or Vietnam as the final location after taking into consideration all factors including infrastructure."

As well as taking advantage of local labour, the Chennai manufacturing facilities give Samsung closer access to the growing Indian market for high-tech consumer goods.
The company predicts that more than 100 million handsets will be sold in India in 2008, according to Korea's Yonhap News Agency.