Samsung cuts executive promotions

Conglomerate reduces function of control tower

By Kim Yoo-chul

Kim You-mee Samsung SDI EVP

Kim Daien Samsung SDS VP

Park Nam-young Samsung C&T VP

Justin Denison Samsung Electronics VP

Samsung conducted a radical reshuffle in its year-end management shakeup amid the continued challenges that the group affiliates face.

On Friday, Samsung Corporate Strategy Office (SCSO), the group control tower, promoted 294 senior- and low-level executives, including 29 executive vice presidents (EVP), 68 senior vice presidents (SVP) and 197 vice presidents (VP).

The number of promotions was the lowest since 2009 when affiliates in trouble in the aftermath of the Asian Financial Crisis promoted only 247 people.

Compared to last year, the number was cut by 59.

“Friday’s reshuffle of under-CEO level executives is aimed at boosting profitability and putting new energy in affiliates by promoting those who have indisputable expertise in areas they are involved in,” said a spokesman at the SCSO.

The reduction has lowered the number of executives in the group to 1,900 from 2,000.

Key affiliate ― Samsung Electronics ― was the most heavily impacted as the consumer electronics unit has seen weak profits since last year, and has lost its position as the biggest smarpthone seller in China, the world’s largest market.

135 were promoted in the shakeup at Samsung Electronics. This was a decrease of 40 percent from the 227 two years ago.

Samsung Electronics reported 7.39 trillion won in operating profits during the third quarter compared with 5.98 trillion won and 6.9 trillion won in the first and second quarters.

Market analysts, however, estimate operating profits for the last three months of the year may fall below 6 trillion won mostly due to weak sales of its Galaxy S6 and Note 5 mobile devices.

Samsung changed the head of its mobile devices division. Ko Dong-jin was promoted to president to take over day-to-day operations from his predecessor Shin Jong-kyun. Shin will remain as head of the overall division; however, he will step back from operations to focus more on long-term strategies.

Prove yourself, then we promote

The SCSO said 44 people benefited from its Samsung Fast Track promotion system, in which the group promotes employees who performed remarkably well two to three levels.

“Although, the number of winners in the system was also cut by 12 from last year’s 56, Samsung is trying hard to inspire new employees,” it said.

Under initiatives for gender balance, Samsung promoted nine women including one EVP ― Kim You-mee at Samsung SDI, the group’s components-making affiliate.

Samsung said her steady contribution for the development of small- and large-sized batteries for electric vehicles paid off.

One thing that Samsung has so far taken pride in is cutting gender diversity problems which a lot of Silicon Valley-based companies have still failed to do.

"Samsung is trying hard on issues of diversity. An imbalance between men and women isn't good for corporate soundness; therefore, Samsung will empower more women,” the office said.

The number of foreigners who were promoted as corporate executives was halved to four from last year’s nine.

Out of the four, three of them were from the semiconductor division.

Friday’s reshuffle also included a cut in the role of the SCSO in line with group efforts to reduce fixed costs and to cut back-office functions such as finance, human resources, communications and administration.

“The number of SCSO divisions has been cut from 10 to eight as the office also plans to dismantle a secretarial team for Samsung Chairman Lee Kun-hee,” it said.

Strategy teams one and two will be combined. Team one handles business management and strategies for electronics affiliates, while team two takes deals with non-electronics affiliates.

“The role of secretarial offices will further be cut. Executives at the SFSO will be given a new role at group units,” it said.