Since entering the second half of 2024, Samsung Electronics, a giant in the global consumer electronics industry, has been plunged into troubled times.

Firstly, its semiconductor business has underperformed, with operating profit falling below expectations despite record revenue in the third quarter.

Secondly, workers at Samsung's Indian factories have been on strike demanding wage hikes, which may impact Samsung's strategic layout in India and Southeast Asia.

Thirdly, according to Malaysian media reports, Samsung Electronics plans to lay off thousands of employees in Southeast Asia, Australia, and New Zealand.

As the global economy remains sluggish, Samsung Electronics, a benchmark for the global consumer electronics industry, attracts even more attention with every move it makes. The global layoffs at Samsung may cast a shadow over investors' outlook for the industry in 2025.

Is Samsung's global layoffs an isolated case?

Certainly not! For example, Dyson laid off 1,000 employees in the UK in July and abruptly terminated Singapore employees on October 1 without warning. Amazon, the US e-commerce giant, is rumored to initiate significant layoffs in early 2025, affecting approximately 13,834 management positions.

Moreover, according to Intellizence research, over 4,453 renowned companies globally have announced mass layoffs from January 1 to September 26, 2024.

The pessimistic sentiment emanating from corporate giants is spreading. In the context of global layoffs, Samsung is not immune to the trend.

This article will not delve into Samsung Electronics' other businesses but will focus on the impact of layoffs and strikes in India on its home appliance division, as well as potential moves Samsung may make in its home appliances segment in 2025.

Based on Samsung's layoffs and recent events, several changes may occur in Samsung Electronics' home appliance segment in 2025:

Firstly, Samsung will accelerate its Smart Home strategy to compete for market share with Chinese brands.

The immense pressure faced by Samsung in the home appliance market stems from the expansion of Chinese brands. Over the past decade, Chinese home appliances have established a more comprehensive global supply chain.

From North and South America, Europe, the Middle East, Africa to Southeast Asia, China's home appliance supply chain is now on par with Samsung's. Globally, however, Samsung still surpasses any single Chinese home appliance brand in terms of influence and user base.

Samsung is well aware that amid diluted market share, a global economic downturn, and Chinese brands continuing to outperform the market, it must find ways to contain these Chinese competitors rather than fall behind.

According to former Samsung employees, Samsung will intensify its efforts in Smart Home in 2025, aiming to stay ahead of Chinese brands. This acceleration in Smart Home began in early 2023, with Samsung forming the HCA Alliance with LG, Electrolux, and other brands.

The HCA Alliance aims to develop and promote compatibility and energy management among home appliances, HVAC systems, and TVs within the connected home ecosystem. In simple terms, this alliance enables users to enjoy the convenience of Smart Home across different brands.

For instance, if a Samsung TV serves as the control center for a home, LG's air conditioners, Electrolux's refrigerators, and Whirlpool's washing machines can all break down technical barriers between brands and integrate into the system, allowing seamless control through the Samsung TV. As of last September, over 500 companies were members of this alliance.

Samsung's acceleration in Smart Home in Malaysia is an attempt to bypass price competition with Chinese brands and forge a new path. While Chinese home appliance companies have rapidly grown their Smart Home ecosystems in China, they are still in their infancy in Malaysia and lack the same advantages as in large appliances.

Therefore, Samsung's rapid progress in Smart Home in Malaysia may help it widen the gap with Chinese Smart Home solutions.

Secondly, Samsung will accelerate its AI home appliances and increase user stickiness through system upgrades.

In 2024, AI emerged as a key innovation driver for Samsung home appliances. For premium brands, AI innovation will enhance their position and add value. For the foreseeable future, AI home appliances are likely to be the primary selling point for Samsung's premium lineup.

Taking TVs as an example, in March this year, Samsung TVs embraced the slogan "AI for ALL," signaling a full-scale push into AI integration. Their goal is clear: to integrate AI into connected technology and deliver tangible benefits to users.

In August, Samsung announced seven years of free OS upgrades for its AI-powered Tizen TVs.

As of 2023, Samsung's proprietary Tizen OS has been deployed in over 270 million Samsung Smart TVs, making it the world's largest Smart TV platform. The prospect of free OS upgrades for such a vast user base is undoubtedly appealing.

It's not just TVs. Samsung's AI refrigerators and air conditioners are also accelerating their market entry.

Technologically, Chinese brands are on par with Samsung in AI application. However, Chinese brands lag behind in terms of global brand recognition, user base, and brand history.

Therefore, even with similar technology, Samsung retains a slight advantage in branding and user base when viewed from an AI starting line.

By focusing on AI and delighting users with free system upgrades, Samsung home appliances are poised to accelerate their AI integration across all categories in 2025.

Thirdly, Samsung may engage in price wars for its mid-range products, with a continued focus on physical store channels.

Samsung generally avoids price wars in the Malaysian market, especially for premium products, where prices remain relatively stable. Mid-range products occasionally face promotional challenges from Chinese brands, but price-driven competition is not Samsung's norm.

For instance, a mid-range Samsung refrigerator might retail for 4,000 Malaysian Ringgit, while a similarly designed and functional Chinese model of the same model might cost just 3,200 Ringgit. To compete, Samsung might lower its price to 3,400 Ringgit, remaining 10-15% more expensive than the Chinese alternative.

By doing so, Samsung can maintain its premium positioning while still attracting customers willing to pay a slight premium for the Samsung brand.

Samsung has maintained relatively stable prices for its premium products, ensuring the interests of both channel partners and itself.

For the most part, Samsung's mid-range products also avoid sustained price wars. Instead, they may offer gifts, extended warranties, or value-added services to please customers.

AI home appliances will continue to be a key focus for Samsung going forward. To promote AI home appliances, industry insiders close to Samsung indicate that the company will continue to expand its channel reach and deepen relationships with channel partners in 2025. For Samsung, which primarily offers mid- to high-end products, online sales are not a primary focus in Malaysia due to the low-price strategy prevalent in the online market, which clashes with Samsung's brand positioning.

In summary, Samsung Electronics' global layoffs are aimed at enhancing its long-term sustainability through personnel adjustments, product mix optimization, and technological innovation to secure greater profits.