The consumer spending spree witnessed after the COVID-19 pandemic lockdowns appears to be over now. Financial experts around the world forecast a global recession, and the smartphone market has started to brace for the economic downturn. Even Samsung seems to have scaled back smartphone production.
Although Samsung claimed that it expects smartphone sales to stay flat or achieve single-digit growth in the second half of the year, things appear to be different in its smartphone manufacturing plans in Vietnam. An exclusive report from Reuters claims that Samsung has cut smartphone production at its smartphone factory in Thai Nguyen. This plant churns out 100 million smartphones every year. Combined, two phone plants in the country are responsible for producing half of Samsung's annual phone output.
Is Samsung expecting a considerable fall in smartphone sales in the second half of 2022?
Various workers at the plant claim that some production lines are working for just three days a week compared to six days earlier. Some lines are working for just four days a week. Of course, there doesn't seem to be any overtime allowed. However, Reuters quickly claimed that it doesn't know if Samsung is shifting some of the production outside of Vietnam (India or South Korea).
Almost all factory workers in Vietnam interviewed by Reuters claim that business is not good at all. This time last year, smartphone production was reportedly at its peak. However, things are different now. Some workers claimed that they haven't ever seen smartphone production this low. Job cuts could happen, but nothing has been announced yet.
Various global brands, including Best Buy, Canoo, Clubhouse, Coinbase, Microsoft, Netflix, PayPal, Robinhood, Substack, Tesla, TikTok, Twitter, Vimeo, and Virgin Hyperloop, have announced job cuts. Others, including Facebook and Google, have hinted at possible job cuts due to decreased consumer spending and a falling global economy.
