This week, dozens of executives of the mobile unit of Samsung Electronics were relieved from
their jobs as part of the annual shuffling of the company. According to people with knowledge of
the matter, this move is also part of the smartphone giant’s effort for reversing the steep
declines in its earnings. The official name of the unit is IT and mobile communications and about
200 executives are employed in it. It wasn’t immediately made clear by Samsung as to how
many would be reassigned and how many were told to leave the firm. On Wednesday, the
mobile unit employees who did lose their job included senior vice presidents, vice presidents
and executive vice presidents as well.
Some of them belonged to media solution center, marketing and development divisions. No
comment was made by a Samsung spokesperson regarding this matter. The largest company
of South Korea by market capitalization, Samsung Electronics is known for strict management
of employees and fast execution of decisions and operations as opposed to other Korean
companies. It isn’t uncommon for Samsung executives to receive demotions, promotions or job
cuts, but analysts have stated that the scope of change is a lot different than the previous year.
Last year, the company had been undergoing expansion and a bigger number of executives had
been given promotions. On Thursday, Samsung Group, the conglomerate to whom Samsung
Electronics belongs to, said that 165 executives would be given promotions in 2015 at Samsung
Electronics. This is in direct contrast to 227 executives who had received promotions the
previous year whereas 226 had been promoted in the year before that. That was when the
mobile business of the company was witnessing rapid growth, as per the information offered by
the conglomerate. According to an analyst, Samsung had wanted to achieve 500 million sales
units in the long term.
However, now the company is expected to have 320 million smartphone shipments this year,
which is similar to the levels reached last year. Therefore, based on the assumption that any
high growth is unlikely next year as well, the company may have chosen to reassign executives
to different business units in accordance with the modest sales levels. Analysts further said that
because of the executive cuts, a large number of mobile executive staff can also be reassigned.
Samsung Group said that the personal appointments and reorganization plans regarding
different affiliates would be announced soon.
The media solution center is one very important division. It had about 15 executives, but lost
around half of them and the president of the division was also reassigned to head the office of
global marketing strategy of the South Korean giant. The surprising fact is that he hasn’t been
replaced so there could be major cutbacks in the unit that’s responsible for developing mobile
apps and software. This week, Samsung had also announced that the chief executive of the
mobile unit would be retained, but some president-level executives would be removed from their
positions. Amongst the people moved include the former head and president of mobile
marketing, D.J. Lee.