Samsung Electronics Network Division, responsible for 6G communication, one of the company’s next growth engines, is implementing an emergency management system following poor performance.
According to the IT industry, Samsung Electronics’ Networks Division will hold an employee briefing on May 10. President Kim Woo-june will announce plans to strengthen competitiveness, including business reorganization and cost reduction measures.
First, to reduce expenses, executives will be required to travel in economy class instead of business class on business trips and will receive the same level of accommodation as regular employees.
As of the end of last year, the Network Division had 37 executives. Additionally, the plan will allow employees dispatched to the Mobile or Visual Display Divisions for business expansion to return to their original positions if they wish. The company also plans to reorganize its business structure to prioritize profitability over growth.
The decision to implement emergency management measures in the Network Division is primarily attributed to the downturn in the global telecommunications market. There is limited additional demand as 5G infrastructure investments are nearing completion worldwide. Samsung Electronics Network Division generated $2.8 billion (3.78 trillion won) in revenue last year, down 29.7% from $3.9 billion (5.38 trillion won) in 2022.
An IT industry insider said, “With the end of 5G investments, sales will be low, but the company will have to continue with 6G technology. It’s not easy to sustain 6G until it’s commercialized.”
6G is Samsung’s next significant growth engine. Earlier this year, Chairman Lee Jae-yong visited a 6G technology research and development site as part of his first management trip. Global telecom equipment giants are also tightening their belts.
According to the Wall Street Journal, Sweden’s Ericsson, the world’s second-largest telecommunications equipment company, plans to cut 8,500 global employees this year. In March, the company laid off 1,200 workers at its headquarters in Sweden, and last month, it laid off 240 employees at a research facility in China. Finland’s Nokia, the industry’s third-largest player, plans to lay off 14,000 people, or 16% of its 86,000 employees, by 2026. The company aims to save up to €1.2 billion ($1.8 trillion). Cisco, the second-largest telecommunications infrastructure player, is reportedly laying off thousands this year.
