Briefing: Samsung laying off employees at its last smartphone factory in China
Jun 5, 2019
What happened: Samsung, the biggest smartphone maker in the world, is laying off employees at its last smartphone manufacturing plant in China. The South Korean smartphone maker told employees at its plant in Huizhou in southern Guangdong Province to voluntarily sign up for a layoff compensation plan by June 14. The plant is Samsung’s last manufacturing facility in China after its plant in the northern port city of Tianjin shut down in December 2018. The Huizhou plant manufactured 62.6 million smartphones in 2017, accounting for 17% of Samsung’s global production that year.
Why it’s important: Samsung faces fierce competition and rising costs in China. The company sold 3.4 million smartphones in China in 2018, accounting for only 0.8% of the country’s total smartphone sales, according to market research firm Strategy Analytics. The company had 20% of China’s smartphone market in 2013. Production costs in China are also on the rise. The average monthly wage in Huizhou surged to RMB 5,690 (around $822) in 2018 from RMB 1,894 in 2008. The company is relocating its smartphone manufacturing lines to Vietnam, which now comprises 40% of its global smartphone production.