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By Phuong Nguyen
THAI NGUYEN, Vietnam (Reuters) – Samsung Electronics Co Ltd has scaled again manufacturing at its huge smartphone plant in Vietnam, workers say, as retailers and warehouses grapple with rising stock amid a world fall in shopper spending.
America’s largest warehouse market is full and main U.S. retailers corresponding to Finest Purchase and Goal Corp warn of slowing gross sales as buyers tighten their belts after early COVID-era spending binges.
The impact is acutely felt in Vietnam’s northern province of Thai Nguyen, considered one of Samsung’s two cell manufacturing bases within the nation the place the world’s largest smartphone vendor churns out half of its cellphone output, in line with the Vietnam authorities.
Graphic: US enterprise inventories climb on restocking, slower shopper spending – https://fingfx.thomsonreuters.com/gfx/ce/lgpdwywgrvo/USTradeInventories.png
Samsung, which shipped round 270 million smartphones in 2021, says the campus has the capability to make round 100 million gadgets a yr, in line with its web site.
“We’re going to work simply three days per week, some traces are adjusting to a four-day workweek as an alternative of six earlier than, and naturally no time beyond regulation is required,” Pham Thi Thuong, a 28-year-old employee on the plant advised Reuters.
“Enterprise actions had been much more sturdy throughout this time final yr when the COVID-19 outbreak was at its peak. It is so tepid now.”
Reuters couldn’t instantly set up whether or not Samsung is shifting manufacturing to different manufacturing bases to make up for diminished output from the Vietnamese manufacturing unit. The corporate additionally makes telephones in South Korea and India.
Samsung advised Reuters it has not mentioned decreasing its annual manufacturing goal in Vietnam.
The South Korean tech big is comparatively optimistic about smartphone demand within the second half, saying on its earnings name final week that provide disruptions had largely been resolved and that demand would both keep flat and even see single-digit development.
It’s aiming for foldable cellphone gross sales to surpass that of its previous flagship smartphone, the Galaxy Observe, within the second half. It’s anticipated to unveil its newest foldables on Aug. 10.
However a dozen staff interviewed by Reuters exterior the manufacturing unit nearly all mentioned enterprise is just not good.
Thuong and her associates who’ve been working for Samsung for round 5 years mentioned that they had by no means seen deeper manufacturing cuts.
“After all there’s a off-season yearly, typically round June-July, however low means no OT (time beyond regulation), not workday cuts like this,” Thuong mentioned.
She mentioned managers had advised staff inventories had been excessive and there weren’t many new orders.
Analysis agency Gartner expects world smartphone shipments to say no by 6% this yr as a consequence of shopper spending cuts and a pointy gross sales drop in China.
SAMSUNG TOWN
Samsung is Vietnam’s largest international investor and exporter, with six factories throughout the nation, from northern industrial hubs Thai Nguyen and Bac Ninh the place most telephones and components are manufactured, to Ho Chi Minh Metropolis’s plant making fridges and washing machines.
The South Korean firm has poured $18 billion into Vietnam, powering the nation’s financial development. Samsung alone contributes one fifth of Vietnam’s complete exports.
Its arrival almost a decade in the past in Thai Nguyen, about 65 km (40 miles) from the capital Hanoi, remodeled the realm from a sleepy farming district right into a sprawling industrial hub that now additionally manufactures telephones for Chinese language manufacturers together with Xiaomi Corp.
Beneficiant advantages together with subsidised or free meals and lodging have lured tens of hundreds of younger staff to the area, however diminished workhours have now left many feeling the pinch.
“My wage was minimize by half final month as a result of I simply labored 4 days and spent the remaining week doing nothing,” mentioned employee Nguyen Thi Tuoi.
Job cuts are on some staff’ minds however to this point none have been introduced.
“I don’t assume there can be job cuts, just a few working hour cuts to swimsuit the present world state of affairs,” mentioned one employee, declining to be named as a result of she didn’t wish to danger her crew chief function.
“I do hope that the present minimize won’t final lengthy and we are going to quickly be again to regular tempo.”
(Further reporting by Khanh Vu in Hanoi and Joyce Lee in Seoul; Modifying by Miyoung Kim and Stephen Coates)
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