Samsung Electronics, POSCO, SK Hynix, and LG Electronics will lower the number of status semiconductor workers due to a temporary drop in demand. Every company is planning to reduce its workforce by 1/3 from 10% to 15% of the recruits of this year in order to adapt production output in accordance with market conditions.
Samsung Electronics is likely to seek additional employee cuts by not recruiting new workers this year, and such reduction in recruitment will continue to the end of November. The company plans to take more rational manpower control in its semiconductor business, which is the core of the electronics sector. A Samsung official said, “We plan to take corrective measures for fluctuation in the demand and unfavorable market conditions. However, we do not have a specific plan to cut the number of employees and decide to recruit or not every year in our semiconductor business,” and “We are in the process of recruiting new employees as planned, while continuing to make corrective decisions.” Samsung cut a total of 727 jobs in the semiconductor division for the past 2 years.
PO LD announces reductions in new recruitment and counseling sessions due to the recent crisis. POSCO told KM News, “We are considering temporary stoppage of recruitment in May and June amounted to 100 people. It is a move to reduce semiconductor workforce by 10% to 15%. The staff counseling sessions were planned from mid-March to early April in semiconductor division.”
SK Hynix said, “Regardless of decrease in demand for semiconductors, it is adjusting its manpower to maintain a competitive edge in a fast-changing market supporting the introduction of new products.” The company added, “It is currently recruiting new employees as planned, but is reviewing the employment capability and decision for recruitment depending on the demand.”
The Lotte Group LG corporation emphasized that there will be no change in its employee policy for this year.
The reversal began in April 2018. Market researcher IC Insights reported in February that there will be a decrease in revenue by 10% last year. The decrease in revenue last year was lower than the 23% decline in 2015 due to drastic drop in oil prices, and was the second major fall of semiconductor demand since 2008. The current negative demand has continued due to prolonged trade frictions.
According to financial data provider Xignite, the production capacity is likely to fall again, as the semiconductor equipment manufacturers are likely to sell $37.2 billion worth of equipment this year, which is 16% lower than the previous year. Production capacity is expected to fall at this rate for the next 2 years, with $35.8 billion in 2021, based on the firm’s semi-business, Reuters.
Market researcher Gartner suggests that semiconductor production will fall to $436.6 billion in 2019, a decrease of 10.3% from 2018, and will continue to fall 2% until 2021. The firm also predicts that the semiconductor revenue will fall to $392 billion in 2020 and will fall to $370 billion in 2021.
Revenue decrease is expected to lead to decline in employee productivity in 2019 and its production cost to rise.
Revenue decrease is expected to lead to decline in employee productivity in 2019 and its production costs are expected to rise.
An industry official said, “It is unlikely to cut employees for the first time in 3 years in Samsung and SK Hynix, and the medium and small-sized semiconductor companies have been ratioally controlling the number of recruits.”
SK Hynix cut 288 jobs (administration 30, manufacturing 216) through 2018’s voluntary severance payment and natural reduction. It recruited 157 new employees last year.
Meanwhile, Samsung Electronics cuts 727 jobs (administration 638, manufacturing 89) through 2017’s voluntary severance payments and natural reduction. The company recruited 3,540 new employees in 2018.
Leave a Reply