The world's leading smartphone provider is reducing the workforce of its only mobile device factory in Huizhou, Guangdong province.
The size of the cut is not yet confirmed, but sources from China said the dismissal was done on a voluntary basis. The compensation agreement will be signed on June 14th.
Samsung is gradually shifting its smartphone manufacturing operations from China to India
Huizhou factory opened in 1992 and started producing phones in 2006.
The factory has hired more than 6,000 workers to produce about 17% of Samsung's global production in 2017.
Meanwhile, information from Samsung headquarters in Seoul said their base in China has been restructured due to declining sales over the years.
A Samsung official said: "Reducing the workforce at this production facility is part of improving business management efficiency in China. ". The latest figures on the number of employees fired and reduced production capacity are not confirmed.
The narrowing of the latest workforce in Huizhou raises speculation that the company can shut down the remaining factory and pull out of the world's largest smartphone market.
Although Samsung has become the world's largest supplier of smartphones, its market share in China is very low.
The company only accounted for 0.8% of China's smartphone market with sales of 3.4 million units in 2018. This makes Samsung's Strategic Analytics out of the top 10 in the Chinese market.
Meanwhile, Huawei topped the Chinese market with 25.8% market share, followed by Oppo with 20.3%, Vivo with 19.5% and Xiaomi with 12.1%.
Samsung's rival, Apple, is the fifth-largest company in China with 8.2% of the market.
Despite the global success of the Galaxy S10 series, Samsung's smartphone market share in China still stands at 1.1% in the first quarter of this year.
Facing this situation, the Korean tech giant is shifting to India, the largest market after China.
After completing a new smartphone production facility in Noida in August 2018, the company is considering additional screen-related investments and mobile battery backups in India.
Noida factory has an annual capacity of producing 120 million smartphones.
Including a factory in India, Samsung currently operates six smarpthone production facilities worldwide, with one in Gumi, North Gyeongsang Province of Korea.
If the company decides to close the Huizhou factory, it is likely that Noida will take over the factory's mission.
For restructuring in China, another key factor is that the global smartphone market is in a stagnant phase and this is difficult for all manufacturers, not just Samsung.