Lean Times

Samsung Electronics’ Device Solutions Americas headquarters in Silicon Valley
Samsung Electronics’ Device Solutions Americas headquarters in Silicon Valley

Amid sluggish business performances and an economic recession, U.S.-based big tech companies are restructuring. Samsung Electronics’ U.S. semiconductor subsidiary Device Solutions Americas (DSA) also recently laid off employees.

According to industry sources in Silicon Valley on March 7 (local time), in February Samsung Electronics DSA sent all of its employees a notice that it plans to cut 3 percent of its staff due to uncertain economic conditions.

It was a time when big tech companies such as Amazon (18,000), Google’s parent company Alphabet (12,000), Microsoft (10,000), and Dell Technology (6,650) have announced restructurings one after another.

The total number of employees at DSA stood at 1,200. About 30 people were to be subject to the layoffs. They were about 3 percent of DSA’s total employees.

Samsung Electronics DSA executed the unusual reduction in personnel because the overall semiconductor industry hit a recession in the aftermath of a decline in demand due to a global economic recession.

Samsung Electronics posted 270 billion won (US$204 million) in operating profit in the semiconductor division in the fourth quarter of last year. The figure represented a 96.9 percent drop from the same period of 2021. In the first quarter of this year, the Korean semiconductor giant is expected to post a deficit of around 2 trillion won (US$1.5 billion).

U.S.-based semiconductor company Intel logged sales of US$14 billion (18.2 trillion won) and an operating loss of US$700 million (910 billion won) in the fourth quarter of last year, the worst quarterly business performance in 50 years. As the deficit is expected to continue at Intel in the first quarter of 2023, Intel has started to cut costs by laying off thousands of employees at the end of last year.

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