Samsung Electronics Co. suffers the same pain just like other tech giants. Its’ second-quarter number shows how bad the technology slump is. That shows how Samsung cannot face the tech storm.
Samsung’s underlying operating profit will be closer to 5.5 trillion won. It is a three-year low. The operating margin will be closer to 9.8%. That is also the lowest in five years. That also far from the preliminary earnings, 11.6%.
Cutting off 1,000 Employee
Earlier last week, this Korean based Giant technology has sacked 1,000 employees in India. That comes as the consequence of stiff competition with Chinese companies. Samsung has sacked 150-odd employees in October.
They are under-performers employees. They failed to deliver targeted results. As per today, Samsung owns 20,000 employees in India. The job cuts have been agreed upon by Samsung’s headquarter in Seoul. That confirms its goal to generate profit growth instead of revenue from India.
In early 2019 alone, Samsung opened 2,000 jobs in India. However, now, the tech giant has frozen its hiring activities since April.
The battle with Apple
In the middle of 2018, Apple and Samsung have settled their battle. The settlement ended their seven-year-long patent fight. The settlement was not published, but that temporarily ended the battle.
However, in early 2019 Samsung sought compensation from Apple Inc. It aimed to make up for organic light-emitting diode panel orders that fell short of the iPhone maker’s initial expectations. Citigroup Global market estimates 5Samsug could have got $850 million.
There is a deeper concern from investors. If Samsung did secure compensation from Apple, then Apple has to wear the cost of $850 million. That is for a product (displays) that it didn’t even buy.
Moreover, Apple is usually good at predicting its needs. However, it may overestimate to push suppliers. Apple failure to get it right will affect other sectors to calculate demand.