November 04, 2024 – According to recent media reports, Samsung Electronics executives have revealed plans to implement an unprecedented four-round large-scale voluntary retirement program. This initiative is particularly targeted at the company’s continuously loss-making wafer foundry manufacturing team, with the 8-inch foundry manufacturing and technical team facing a reduction of over 30% in its workforce.
The first round of voluntary retirement will be offered to CL3-level employees who have worked for more than 15 years but have not received a promotion in the last five years. The second round will extend the offer to employees who have been with the company for over 10 years.
If the targeted reductions are not achieved, the third round will expand the voluntary retirement option to all employees. The final, fourth round will aim to control the workforce to a level that maintains normal operations. The total estimated compensation for the program is approximately 400 million Korean won, including 380 million Korean won for CL3-based severance pay and four months of wages.
This move by Samsung Electronics is closely linked to the poor performance of its semiconductor business in the third-quarter financial report. The operating profit of its Device Solutions division fell by more than 40% compared to the previous quarter.
Furthermore, Samsung’s failure in the 3nm GAA process has led to customer losses, further exacerbating the losses in its non-memory semiconductor business unit.
Previous reports have indicated that Samsung Electronics’ semiconductor division is temporarily shutting down some of its wafer foundry production lines to reduce costs. It has already closed more than 30% of the production lines at its Pyeongtaek 2 and 3 fabs and plans to expand the closure to 50% by the end of the year, affecting 4nm, 5nm, and 7nm foundry production lines.
As Samsung gradually shuts down some of its wafer foundry production lines, it will inevitably lead to layoffs of the corresponding production line employees.
