A massive wave of layoffs has hit some of the world's largest companies amid the global economic slowdown. So far this year, a total of 115 of the world's top 500 companies in 2015 have created layoff plans. An industry insider has warned the trend may continue into the final months of this year.
Despite its sliding share in China's smartphone market, Samsung again denied a report that it is planning to lay off a large number of employees in its China unit, media reported on Tuesday.
"So far, Samsung has made no plans or decisions about any layoffs in China," a responsible person at Samsung China, who prefers to be -unnamed, was quoted as saying by the National Business Daily on Monday.
The denial came after Tencent Tech reported on Monday, citing an anonymous source close to the matter, that Samsung plans to reduce its workforce in China by about 9 percent, or by more than 1,000 employees.
"The company hasn't officially announced the job cut, but an internal verbal notification shows the layoffs will involve a number of departments like marketing, sales, and research and development," the unnamed person was quoted as saying by Tencent Tech.
It was just last week that a senior Samsung executive denied another rumor that it planned to cut 10 percent of its workforce at its headquarters in South Korea. The executive explained that presumed layoff plan was just a plan to relocate some of its workers.
Still, analysts generally believe that the layoffs make sense for Samsung, considering that high costs have become a major obstacle to growth as the company wrestles with fierce competition and sliding profits in the smartphone business.
In industries such as finance, energy, manufacturing, technology, retail, pharmaceuticals and media, large multinationals have been laying off employees at a faster pace this year.
In September alone, several well-known companies have announced plans to cut jobs.
For instance, ifeng.com, a Beijing-based news portal operated by Phoenix New Media, announced in an internal memo on September 1 a restructuring plan that includes a major cut to its workforce, according to media reports.
The memo said the layoffs are essential to streamline the company's workforce and transform its business as the website has been under great pressure from its undervalued share price and overstaffed team.
On September 2, financial news and data company Bloomberg said it would cut 90 editorial positions, nearly 4 percent of its editorial workforce.
According to a report from -Shanghai-based news portal jiemian.com on Sunday, the top reasons for the job cuts include restructuring, cost cutting, mergers, weakening demand and bankruptcy. While all these reasons are justifiable, many among the public see these waves of job cuts as an ominous omen for the global economy, which could lead to more layoffs at other companies.
Led by the U.S.
Even the world's biggest and most successful companies have not been immune from the mass wave of layoffs.
So far this year, 115 of the world's top 500 companies have crafted layoff plans, statistics from jiemian.com showed.
More than half of these companies - 62 in total - are based in the U.S. - even as the country's unemployment rate has fallen to its lowest level in years.
In the first eight months of 2015, U.S. employers have announced 434,554 job cuts, up 31 percent from the 332,931 planned layoffs during the same period last year, according to data from the US-based human resources consultancy Challenger, Gray & -Christmas.
U.S. companies have cut 54,319 positions on average each month this year, putting them on pace to slash 650,000 jobs from the payrolls in 2015. That figure would be the highest since 2009.
The U.S. energy industry cut the most jobs of any industry in the U.S. over the first eight months of this year, with 71,628 planned layoffs reported. Most of the layoff resulted from the collapse in oil prices in 2014, -according to data from jiemian.com.
"It is too soon to say if we have seen the last of the big oil cuts. As we head into the final months of 2015, there are definitely some red flags that suggest we may see more layoffs from the energy sector, as well as in other area of the economy," John Challenger, CEO of Challenger, Gray & Christmas, was quoted as saying by Central Valley Business Times on September 3.
He also cautioned that more companies may be planning layoffs because most companies tend to make workforce and operational adjustments in the last quarter to meet year-end earnings goals.
A wide scope
Globally speaking, the mass layoffs have been most widespread in the -financial industry this year. The statistics from jiemian.com showed that 29 of the 115 companies planning layoffs this year are in the financial industry, compared with 21 in the energy sector.
After the 2008 financial crisis and the subsequent European debt crisis, the global finance industry went into a long-term downturn. Although the situation may have improved in recent years, low interest rates have eaten into profit margins, forcing many financial institutions to cut costs by slashing jobs, analysts said.
For instance, Barclays Plc plans to cut more than 30,000 jobs over the next two years, The Times reported in July. Under the plan, the bank will reduce its global workforce to fewer than 100,000 people by the end of 2017. It considers the layoffs the only way to address the bank's chronic underperformance and lift its share price, the newspaper said, citing anonymous senior executives.
Other financial companies that are reportedly planning layoffs this year include the Royal Bank of Scotland, Unicredit, PNC Financial Services Group, JP Morgan Chase & Co, HSBC, Standard Chartered, American Express and Bank of America.
Tech is another major industry that has been undergoing a wave of big layoffs this year. Tech companies have generally attributed layoffs to the need to restructure their businesses or cut labor costs against the backdrop of fierce market competition, declining profits and falling market share.
After firing thousands of employees in India in 2014, IBM announced in January that it would lay off about 118,000 workers globally as part of a restructuring program. It was the biggest layoff plan ever by a single company.
In another high-profile layoff announcement, Microsoft announced it planned to let go as many as 7,800 employees, primarily from its phone business. The company had just reduced its workforce by 18,000 in 2014.
