Samsung Shifts From Manufacturing to Development as Headcount Falls, Labor Costs Top $32.9 Billion

Samsung Electronics adds more development staff

Manufacturing roles and overseas headcount decline

Samsung Electronics Co. is increasingly reshaping its workforce around development roles. Overseas employees and manufacturing staff declined, while development positions increased. Labor costs climbed past $32.9 billion. The company’s turnover rate fell, but retaining key talent while keeping the organization dynamic is emerging as a central challenge for its human resources and labor management.

An analysis by Hankyung.com published on July 3 of Samsung Electronics’ sustainability reports for the past five years found the company’s total headcount fell to 259,149 at the end of last year from 266,644 at the end of 2021, a decline of 7,495. The downtrend continued from 267,860 in 2023 to 262,647 in 2024.

The drop was steeper overseas. Overseas headcount fell by 20,933 to 134,585 at the end of last year from 155,518 in 2021. Domestic headcount in South Korea rose by 13,438 over the same period to 124,564 from 111,126.

The shift in workforce structure was more pronounced by job function. Development staff increased by 13,932 to 89,150 last year from 75,218 in 2021. Manufacturing staff, by contrast, fell by 20,299 over the same period to 102,512. Sales and marketing changed little, rising to 23,711 from 23,257. Quality, environment and safety roles edged down to 18,524 from 19,457.

The staffing changes point to a move away from expansion centered on production workers and toward a workforce built around higher-value roles. The shift reflects a human resources strategy focused on recruiting and retaining talent in priority areas as Samsung expands technology-driven businesses including AI semiconductors, Galaxy AI and SmartThings-based home appliances.

Labor costs kept rising even as the workforce shrank. Samsung’s total labor spending rose to $32.9 billion last year from $25.0 billion in 2021. It increased to $27.2 billion in 2022, $27.5 billion in 2023 and $29.3 billion in 2024. That amounted to an increase of $7.9 billion over the period.

Labor costs include wages, retirement benefits and welfare expenses booked under cost of sales, selling and administrative expenses, and research and development costs. The figure goes beyond base pay and also reflects performance compensation, benefits and retirement-related expenses. Employees’ share of distributed economic value also rose to 14.7% last year from 13.9% in 2021. Total headcount fell, but the cost of securing and compensating a development-centered workforce appears to have increased.

The turnover rate declined. Samsung Electronics’ overall turnover rate fell from 13.9% in 2021 to 12.9% in 2022, 10.6% in 2023, 10.1% in 2024 and 8.6% last year. Lower attrition is a positive for organizational stability.

Still, as the workforce shifts toward middle-aged and highly skilled employees, maintaining organizational vitality and redesigning roles across generations are becoming more pressing issues. Employees aged 51 and older accounted for 7.8% of the workforce last year, or 20,327 people. That was up 1.5 percentage points from two years earlier. The challenge is to retain core talent while preserving organizational flexibility as technologies and businesses change.

A representative of a corporate analysis research institute said Samsung Electronics’ human resources and labor management must solve a difficult equation: securing stronger technological competitiveness with fewer workers, controlling a heavier compensation burden than before, and maintaining organizational vitality at the same time.

Kim Dae-young, Hankyung.com reporter kdy@hankyung.com