Samsung Electronics is implementing a second round of layoffs in India, affecting executives in its television and home appliance divisions, as it grapples with declining smartphone sales and increased memory chip import costs driven by global AI demand, a phenomenon known as 'chipflation'.

Samsung Electronics is implementing a second round of layoffs in India, affecting executives in its television and home appliance divisions, as it grapples with declining smartphone sales and increased memory chip import costs driven by global AI demand, a phenomenon known as 'chipflation'.

Samsung Electronics is implementing a second round of layoffs in India, affecting executives in its television and home appliance divisions, as it grapples with declining smartphone sales and increased memory chip import costs driven by global AI demand, a phenomenon known as 'chipflation'.

Samsung Electronics has initiated a round of layoffs in India, according to media reports. This is the smartphone maker’s second round of job cuts in 2026, after the brand’s US wing made a significant cut of around 739 positions in July.

Around 80 to 100 executives have been asked to leave the brand’s television and home appliance businesses. Industry executives told ET that the cuts will affect employees at various levels, from brand and area managers to director-level officials and team leads.

While the job cuts have been focused on Samsung’s television and home appliance operations, the total number of affected employees could increase. An executive stated that up to 25 per cent of sales and marketing staff in the electronics business could eventually be affected. This can include both Samsung’s payroll and off-roll workers hired through manpower agencies.

Samsung’s domestic electronics sales organisation has around 550 to 600 executives, excluding the large smartphone sales team. Factoring in the 25 per cent, this could mean roughly 150 employees are affected from the domestic sales team.

The layoffs are reportedly being conducted in batches. An affected employee quoted in the news report said that the company had been issuing termination letters for the past few days.

The company is reportedly offering three months’ salary and an additional month’s pay for every year of service. However, the company asked employees to leave without serving their notice period.

The massive global demand for AI has caused a surge in memory chip costs by 400 per cent over the past year. Samsung Electronics stock has skyrocketed to a trillion-dollar market capitalisation because of this demand, with the growth driven entirely by its global semiconductor business. However, its India unit lacks a local semiconductor wing, leaving it highly vulnerable to the memory chip import costs. This directly increases the manufacturing costs for smartphones, televisions, and home appliances in India. Industry experts call this phenomenon chipflation.

As three-fourths of Samsung’s local revenue comes from smartphones, the company is susceptible to changes in smartphone demand. Industry estimates indicate that smartphone sales in India have weakened by 11 to 12 per cent. The brand is also unable to expand its high-value air-conditioner business in India despite aggressive efforts.

To cope with weakening smartphone demand and the growing pressure on the consumer electronics business, the company is resorting to layoffs. The report also indicates that the brand is consolidating its brand network to reduce costs.

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