Samsung Electronics details changes to combat slump

SEOUL, Jan. 21 (Yonhap) -- Samsung Electronics Co., the world's largest maker of computer memory chips, said Wednesday it was replacing all heads of its overseas units as part of a reorganization aimed at coping with the deepening global economic slump.

In what the company called the biggest-ever personnel reshuffle in its
40-year-old history, Samsung also reassigned 85 percent of the workforce at its
Seoul headquarters, or some 1,200 employees, to production lines, sales
operations or regional offices.
Only about 200 employees, who are in charge of legal affairs, public relations,
investor relations, management support and auditing, will remain at the
headquarters, Samsung said.
Wednesday's reshuffle came less than a week after Samsung consolidated its four
business divisions -- semiconductors, liquid-crystal displays, mobile phones and
consumer electronics -- into two major groups, in what some analysts say shows a
shift to focus on profitability.
"To help it through the current phase of crisis following the worldwide economic
recession, next-generation leaders are named to head overseas subsidiaries,"
Samsung said in a statement.
Samsung cut the pay of its approximate 820 executives by 20 percent and slashed
other benefits, according to the statement.
Those who were appointed to lead overseas units mostly have backgrounds in
marketing.
Among others, Vice President Choi Chang-gyu, a senior marketing executive for
wireless equipment, was named to head Samsung's U.S. subsidiary and Vice
President Shin Sang-heung of television marketing was appointed to lead the
company's European operations.
Samsung, which is also the world's No. 1 maker of liquid-crystal displays and No.
2 maker of mobile phones, has been hurt by sinking global demand for
semiconductors and flat-panel televisions amid the financial turbulence.
The company, which is due to release its earnings for the final quarter of 2008
on Friday, is widely expected to swing to a net loss, according to some analysts.
Merrill Lynch said this week that Samsung may post an operating loss of up to 400
billion won (US$291 million) in the worst-case scenario for the October-December
period last year.
In the third-quarter of last year, Samsung reported an operating profit of 1.02
trillion won, down 51 percent from a year earlier.
The serious recent management shuffling marked the first such effort since former
Samsung Group chairman stepped down in April last year in the wake of a
parliament-ordered corruption probe that led to his indictment on tax evasion and
other charges.
In October last year, an appellate court upheld a lower court's decision to give
Lee a three-year suspended jail term.
On Friday, Samsung Electronics Vice Chairman and Chief Executive Officer Lee
Yoon-woo, 63, was named to head the chip and LCD division, while the company's
handset chief Choi Gee-sung, 58, was promoted to vice chairman to head the
consumer electronics and mobile phone division.
The promotion of Choi was spotlighted because he is considered a close confidante
of Lee Jae-yong, the only son of former Samsung chairman Lee.
But, the younger Lee, who serves as senior vice president of Samsung Electronics
didn't get a promotion in the recent group-wide reshuffle of senior executives.
When the junior Lee, 40, will inherit the wealth and thereby control of the group
from his 69-year-old father is a matter of serious concern at home and abroad.
There is no fixed rule for leadership or management change in South Korea's
family-controlled conglomerates but a father-to-son succession has virtually
become the standard norm of choice.
The senior Lee took over Samsung when his father and founder of the group died in
1989. Few doubt that the same leadership shift will take place in Samsung in due
course of time.
(END)