Samsung Electronics is relocating its Europe headquarters, currently based in London, to Poland’s capital Warsaw as part of its business restructuring both at home and abroad, multiple sources said Tuesday.
“Mobile communications and other key business divisions have already started moving. The relocation will finish within the year,” an industry source close to the matter said on condition of anonymity.
London has long served as the regional base for the Korean tech giant’s upscale push in Europe. The company has also unveiled its flagship Galaxy phones in the U.K. capital.
The relocation plan hints at a possible shift in the company’s premium strategy. Following the relocation, more resources are expected to be poured into emerging markets in Eastern Europe rather than the advanced but saturated Western European market.
Europe is one of the less profitable regions for Samsung. Last year, its sales there fell 22.7 percent to 42.95 trillion won ($37.36 billion), compared to the previous year’s 52.67 trillion won.
While its European rivals took advantage of the weakening euro, Samsung had to compete with even cheaper products from Chinese brands.
“Samsung is laying off employees in Europe. The relocation seems to be part of its business restructuring amid sluggish sales,” said another source.
A Samsung spokesperson, however, denied the relocation plan.
In Poland, Samsung has operated a manufacturing plant after it acquired a local home appliance maker, Amica, in 2009. The company also runs a research and development center in the country.
In May, Samsung Group heir apparent and Samsung Electronics vice chairman Lee Jae-yong visited the Polish manufacturing site for inspection.
By Lee Ji-yoon (jylee@heraldcorp.com)
