Samsung Galaxy S6 Edge camera image 002

According to a report by Korean newspaper which was relayed Tuesday by Bloomberg, Samsung Electronics is about to lay off ten percent of workers at its headquarters in South Korea “as the world’s biggest smartphone maker loses sales to Apple and Chinese vendors.”

It is no secret that things have been tough for Samsung ever since Apple released its larger-screened iPhones. In addition, strong competition from China’s vendors like Huawei and Xiaomi, which build comparable phones that cost half as much as Samsung’s high-end devices, has contributed to Samsung’s diminishing sales in China.

Samsung will be cutting fat by letting go workers in the human resources, public relations and finance departments, Korea Economic Daily reported Tuesday. It also plans to “cut some expenses next year” as well. The Galaxy maker had a total of 98,999 employees at its headquarters as of June 30.

Nomura Holdings analyst Chung Chang Won expects Samsung to augment these cost cutting measures with more “tightly controlled” spending on its mobile business.

“Samsung’s preparing to tighten its belt as it isn’t likely see rapid profit growth in the years to come,” he said.

Since April, Samsung’s market value has dropped by more than $40 billion following five straight monthly declines. Its share of global smartphone shipments fell more than three percentage points in the second quarter.

Samsung Galaxy Edge Plus and Note5 image 001

The firm is no longer the top phone seller in China, the world’s biggest mobile phone market with population of 1.33 billion people. The South Korean conglomerate recently updated its Note phablet lineup with the release of the Note5.

Additionally, it’s refreshed the Galaxy lineup with a new 5.7-inch Galaxy S6 edge+ smartphone, is getting ready to release the Tizen OS-driven Gear S2 smartwatch with up to three days of battery life and has been betting big on so-called Internet of Things.

Meanwhile, Apple is a little more than 24 hours away from unveiling its iPhone 6s and 6s Plus smartphones, new iPads (possibly including the rumored iPad Pro) and a revamped Apple TV set-top box.

Source: Bloomberg

  • George

    IPhone sales will drop now that people realize they aren’t actually paying $200 for an iPhone.

    • Toukale

      Enough with that bs already. The only people this would affect are new users. If you are on verizon and wants to renew your contract, it’s business as usual.

    • This joke is 7 years old. Youd think it’ll die someday, but it always lives to see another day!

      • George

        I said drop not die

    • ravinigga

      Same for others phones.

  • Chuck Finley

    “The iPhone effect”…what an absolute joke considering Apple itself has dropped to third place in China.

    There are drops in sales for both Apple AND Samsung due to Xiaomi and Huawei taking first and second place in terms of sales.

    • Anonymous

      I don’t believe the iPhone has every been number one in china, simply that there sales are continue to increase.

      • Chuck Finley

        They were at the start of this year, but they’ve been beaten by two Chinese brands. My main point isn’t that iPhone sales are falling, my point is that the fanboy opinion that Samsung’s drop in sales is due to Apple is dumb when it’s due to Xiaomi and Huawei.

    • That_Fruitarian

      iPhones sales have continued to increase year over year. When did iPhone sales drop?

    • Rowan09

      Dude if you believe the iPhone has no effect then you’re living under a rock.

      • Chuck Finley

        Try this new fangled thing called reading comprehension. My comment was in relation to the article implying that Samsung’s lost sales in China are due to the iPhone when they’re not, they’re due to the rise of Xiaomi and Huawei.

      • Rowan09

        Oh so the iPhone growing 75% in China more than any other smartphone didn’t do anything huh? Give me a break. No one is saying it’s only because of the iPhone, but that’s the main reason due to the screen upgrade.

  • Anonymous

    I’m an iPhone fan boy for sure, but I think samsung should not have taken after apple with there metal casing. Granted I do think the new samsung phone look better now. However, i think they had a better niche against apple with phones that you could switch out the battery, SD cards, etc.

    • Dan

      I agree. The simple fact that I can’t use a sd card with the Note 5 ensures that I will never buy it, or any other Samsung product for that matter. Good thing there are always other interesting android phones around the corner.

    • Rowan09

      I’ve said it for 3 years now. What happens when all those specs they keep bragging about catch up with them? They did quad core, octa core, more RAM, 4K screen, curved screen, what can they offer to make people upgrade? Why should I year over year or 2 years get the Note 7 when they have competition with the Edge +? Samsung kills their own phones and they are competing with themselves.

  • Eldaria

    No iPhone effect here, Samsung has just dropped the ball, the last two Flagship phones have been a disappointment going backwards. They simply copied too much from the iPhone instead of copy and improve. What made the Samsung phones unique compared to the competition is simply gone, they have nothing extra to offer that you can’t find in the competition and that is by far not only the iPhone. The Samsung Galaxy S4 was what made me leave the iPhone, but the new iPhone has nothing that I want so not moving back, I was thinking about going for a Galaxy Note 5, but when it was revealed I was so utterly disappointed, what a crap, removing the user replaceable battery and SD-card, some gimmicky curved screen. Bah!

    • Rowan09

      It’s been about 3 years now of declining sales.

  • Mariano

    Iphone effect? Come on idownload blog.

  • Poor reporting! This is not the iphone effect – this is the effect of the Chinese Apple Xiaomi and other no names who have waterboarded Samsung.

    • Shinonuke

      Xiaomi and other no name? I think “other no names” are brands you haven’t heard about? I the U.S., these companies doesn’t sell much, but in China they are pretty big.

  • Xee

    Apple next, unless they drop prices.

  • Micrones

    Iphone Effect!!!

    Poor reporting, Mr Zilberg i think you can do better with your analysis.

    Apple was never no 1 in China, Xiaomi and Huawei has been eating everyone’s lunch in China for awhile and will continue to do so, Samsung decline in Asia has nothing to do with Iphone.

    People seem to forget that Samsung is a conglomerate in several industries and not a 2-3 product company like Apple or other phone manufacturers, for a conglomerate cost cutting on non performing divisions will occur from time to time. Samsung has a high likelihood of being in business longer than a bunch of other companies out there due to their vast product portfolio.

    More so billions was wiped off every international company value that doing business in China a few weeks ago which includes Apple and Samsung and this was due to the Chinese stock market volatility.

    The world does not revolve around Iphone or Apple.

    • Shankar Dasika

      perfectly put.
      when I saw the words “Iphone effect” i immediately realized this must be one of the assberg articles.Man that guy is the resident IDB troll spoiling this website with his hate for samsung and all.

  • Tommy Gumbs

    This happens with every biz. One day all these pretty buildings that Apple is currently building will lay empty with tall grass.

    • Micrones

      Completely agree with you, though not being negative, no business lasts forever
      The next big business or idea is just around the corner, in a few years from now, we might be talking of another company…

  • Dan

    Of course this is all due to the iPhone.
    Someone needs to read up on causality.
    Typical Zibreg, stroking the flame.

  • Jim Hart

    The “iPhone Effect” happens whenever your bank account empties or your credit card gets maxxed out.