Successive quarters of poor financial results and struggling smartphone sales have left a number of questions hanging over Samsung’s mobile division. Following earlier suggestions that Samsung may be preparing to shuffle the men at the top, there also looks to be big changes in the works for employees across the business.
According to industry sources, Samsung is looking to shed up to 30 percent of the workforce at its mobile division, which works out to roughly 6,700 of the 28,000 employees currently working within the division. This could result in up to one ninth of Samsung’s entire workforce leaving the company.
Samsung is on track to streamline its business units – Samsung official
The cuts won’t necessarily be applied evenly throughout the division, the Mobile Solutions Center (MSC) appears to be in-line for the biggest hit. The MSC currently oversees development and maintenance of Samsung’s platform content, such as Samsung Books and its music hub which were designed to compete with Google’s own media services. After poor user take-up, Samsung has already started winding down these services. The MSC could be end up being merged with the mobile business section of the division.
Samsung Electronics plans to exit from the mobile messaging market from region-to-region as part of corporate strategy to restructure unprofitable businesses and improve profitability,
Samsung itself has also announced that it is looking to scale down its mobile messaging application business, again due to weakening profits. Despite not generatating a large number of transactions, the company’s ChatOn service is currently moderately popular in the 120 plus countries that it is available in, so this move is likely to disappoint some. Samsung states that the ChatOn client will be updated for service users in some markets before being pulled down completely.
From a business point of view, ChatOn isn’t a business that can show improvement in the future,
A spokesperson for Samsung could neither confirm nor deny anything about managerial or staff reshuffles until next month. However, Samsung is clearly reassessing its priorities following the mobile division’s poor performance throughout the year.