Unique: Samsung workers in Vietnam bear the brunt of slowdown in world electronics demand

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Thai Nguyen, Vietnam, Aug 4 (Reuters) – Samsung Electronics Co Ltd has reduce manufacturing at its giant smartphone plant in Vietnam, employees say, as retailers and warehouses battle with rising stock amid a world decline in shopper spending. are.

America’s largest warehouse market is full and main US retailers resembling Greatest Purchase (BBY.N) and Goal Corp (TGT.N) have warned of slowing gross sales as buyers lose their cash after COVID-era early spending. Tighten the belt. learn extra

Its influence is felt acutely in Vietnam’s northern province of Thai Nguyen, one in all two cellular manufacturing bases for Samsung (005930.KS) within the nation, the place the world’s largest smartphone vendor churns out half of its cellphone manufacturing. In line with the Authorities of Vietnam.

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US climbs on restocking commerce inventories, shopper spending slows

Samsung, which shipped about 270 million smartphones in 2021, says the campus has the capability to fabricate about 100 million units yearly, in response to its web site.

“We’re solely going to work three days per week, with some traces adjusting to a four-day work week as a substitute of the primary six, and definitely no additional time is required,” was Pham, a 28-year-old employee on the plant. Thung instructed Reuters.

“Enterprise exercise was even stronger final yr throughout this time when the COVID-19 outbreak was at its peak. It’s a lot decrease now.”

Reuters couldn’t instantly set up whether or not Samsung was shifting manufacturing from the Vietnamese manufacturing unit to different manufacturing bases for much less. The corporate additionally makes telephones in South Korea and India.

Samsung instructed Reuters it has not mentioned reducing its annual manufacturing goal in Vietnam.

The South Korean tech large is comparatively optimistic about smartphone demand within the second half, saying on its earnings name final week that the availability disruption was largely resolved and that demand will both stay flat and even Single digit development may also be seen. learn extra

It’s aiming to surpass the gross sales of the foldable cellphone from its earlier flagship smartphone, the Galaxy Notice, within the second half. It’s anticipated to unveil its newest foldable on August 10.

However of greater than a dozen employees interviewed by Reuters exterior the manufacturing unit, nearly all mentioned enterprise will not be doing nicely.

Staff make their solution to work at a Samsung manufacturing unit in Thai Nguyen Province, north of Hanoi, Vietnam, on October 13, 2016. Reuters/Kham

Thuong and his buddies, who’ve been working for Samsung for practically 5 years, mentioned they’d by no means seen a deep reduce in manufacturing.

“In fact, there’s a off-season yearly, usually round June-July, however much less doesn’t imply OT (additional time), thus not reducing the workday,” Thuong mentioned.

She mentioned managers had identified that the listing of employees was excessive and there weren’t many new orders.

Analysis agency Gartner expects world smartphone shipments to drop 6% this yr attributable to cuts in shopper spending and a pointy drop in gross sales in China.

Samsung City

Samsung is Vietnam’s largest overseas investor and exporter, with six factories throughout the nation, from northern industrial hubs Thai Nguyen and Bac Ninh, the place most telephones and elements are manufactured, to Ho Chi Minh Metropolis’s fridge and washer factories. till.

The South Korean firm has invested $18 billion in Vietnam, boosting the nation’s financial development. Samsung alone accounts for a fifth of Vietnam’s exports.

Its arrival practically a decade in the past in Thai Nguyen, about 65 km (40 mi) from the capital Hanoi, remodeled the area from a sleepy agricultural district right into a sprawling industrial hub, now house to Chinese language manufacturers together with Xiaomi Corp (1810.HK). Additionally manufactures telephones.) )

Beneficiant advantages, together with subsidies or free meals and housing, have attracted hundreds of younger employees to the sector, however decreased working hours have left many in hassle.

“Final month my wage was reduce in half as a result of I solely labored 4 days and did nothing for the remainder of the week,” mentioned employee Nguyen Thi Tuoi.

Job cuts are on the minds of some workers however none have been introduced but.

“I do not suppose there will likely be job cuts, there will likely be a reduce in some work hours according to the present world scenario,” mentioned one employee, who declined to be named as she didn’t wish to danger her group chief function. .

“I’m hopeful that the present cuts won’t final lengthy and that we’ll be again to regular tempo quickly.”

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Extra reporting by Khan Woo in Hanoi and Joyce Lee in Seoul; Modifying by Mieong Kim and Stephen Coates

Our Requirements: Thomson Reuters Belief Ideas.

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