As AI demand drives record chip profits, surging component costs squeeze Samsung’s phone and TV units, forcing a massive US workforce pivot to Texas.
Seoul: Samsung Electronics has cut jobs at its US display, phone and other consumer electronics operations – affecting workers mainly in New Jersey and Texas, according to documents and two people familiar with the matter.
The South Korean tech giant said on Sunday in a statement to Reuters that 739 roles in Englewood Cliffs, New Jersey, have been affected by plans by Samsung Electronics America (SEA) which is focused on consumer electronics and does not include chips to move its headquarters to Texas.
A majority of people affected have received relocation offers, but others were let go, it added without elaborating.
At SEA’s Plano, Texas office, some 100 workers including staff in its mobile division, have been let go, according to one person who said they were among the employees laid off. Sources declined to be identified because of the sensitivity of the issue.
The cuts – though related to the shift in headquarters underscore diverging fortunes within the South Korean tech giant with its chip division skyrocketing to record profit but its consumer electronics units languishing as chip costs surge.
Samsung’s decision to shift SEA’s headquarters is striking because SEA employees in New Jersey only moved to new offices with much fanfare less than a year ago. SEA employs about 1,200 workers in New Jersey, according to a press release by U.S. Representative Josh Gottheimer, who attended an event to mark the opening of the new offices in September.
While the precise extent of the layoffs at SEA could not be learned, documents seen by Reuters show that the unit notified some employees on June 30 of an “enterprise-wide reduction-in-force”, adding that there were a “significant number of impacts”.
LinkedIn posts reviewed by Reuters also show more than 30 workers, including senior sales and marketing officials in both Texas and New Jersey as well as a few in other U.S. locations, said they have been let go or left the company over the past couple of weeks.
Details about the job losses at SEA have not previously been reported.
Samsung said in its statement that the shift of SEA’s headquarters “may lead to changes in our workforce structure, such as employees who are unable to relocate, or certain functions that are optimized to ensure our roles align to key business priorities.”
CHIP DIVISION SOARS, BUT MOBILE MAY POST LOSS
Samsung has flagged it will likely post a 19-fold jump in second-quarter profit on strong AI-driven chip demand. It also announced plans last month to invest hundreds of billions of dollars in new chip plants.
Its mobile division, however, is expected to post its first-ever loss, as it grapples with intense competition from Apple. Chinese rivals like TCL and Hisense are also challenging Samsung in televisions and home appliances. Higher chip costs due to the AI boom have weighed on earnings for all of its consumer electronics products.
Samsung’s job cuts mirror moves by other global firms including Microsoft, Amazon and Meta, which have shed jobs while redirecting spending toward AI infrastructure.
It has also joined Tesla, Oracle and other tech companies in moving headquarters or major operations to Texas, known for lower taxes and business-friendly regulations. The state is already home to Samsung’s chip factories and a mobile hub in Plano.
Samsung workers are concerned the recent job cuts could be followed by additional layoffs and a consolidation of the company’s appliance, home entertainment and mobile divisions, as it focuses resources on chips, a current SEA employee said.
Samsung said in its statement there was currently no broad, global restructuring underway within its consumer product business.
The relocation of the unit’s headquarters is intended to foster “stronger collaboration and optimize the organization by bringing more teams together within a growing technology and AI ecosystem,” it said.
Samsung Electronics had 11,770 employees in the United States as of the end of 2025, which includes workers in its chip division.
Samsung’s IT services affiliate Samsung SDS America, has flagged that 179 roles could be cut at Ridgefield Park, New Jersey, according to a June notice required under the state’s laws.
Those personnel changes are due to the relocation of Samsung SDS’ North American headquarters and had nothing to do with layoffs or restructuring, Samsung said.
