Samsung, the world’s largest smartphone vendor, has started to lay off its factory employees in Huizhou, a city in South China’s Guangdong provice, Chinese business media outlet Caixin reported on Tuesday.
At the moment, the discharges are on a voluntary basis, so it remains unclear how quickly the plant will downsize its personnel. The plant’s workers can indicate their readiness to be laid off before June 14, and receive severance pay that is more favorable than what is required by Chinese labor law.
Samsung’s Huizhou factory was established in 1992 and incorporated a smartphone assemble line in 2006. A total of 62.57 million smartphones were produced in the plant in 2017, accounting for 17% of Samsung’s entire production that year.
It is the only Samsung production facility left in China after the company closed its Tianjin plant at the end of last year.
Samsung leads in worldwide smartphone shipments, with 71.8 million units being shipped in the first three months of this year. But it has been trailing behind Huawei, OPPO, Vivo, Xiaomi, and Apple in China for several years.
In April, the company canceled a long-anticipated launch ceremony for its foldable phone, the Galaxy Fold, and has yet to set a new date for its official launch.
Its Galaxy flagship smartphones were once pinned with high hopes from Samsung’s management as a means for a comeback in China, the world’s largest smartphone market.