Samsung Cuts Execs’ Payroll
By Kim Yoo-chul
Staff Reporter
Samsung Group yesterday conducted a reshuffle of below-CEO-level executives that were highlighted by three things ― a 10 percent cut in their number; promotions of technology specialists and the exclusion of Lee Jae-yong, the only son of former Chairman Lee Kun-hee, from the list of promotions.
According to Samsung, a total of 247 executives were promoted with 91 coming from Samsung Electronics, the group's flagship.
"The group cut the number of executives by 10 percent,'' Group Vice President Yoon Soon-bong told reporters.
"About 40 percent of the new executives are from research and development areas."
He also said that the promotions were geared toward the emerging markets with the portion of executives responsible for these markets up 5 percentage points to 14 percent.
Yesterday's reshuffle follows last week's CEO shakeup.
In terms of apparatus, four of its key businesses ― chips, LCDs, mobile phones and TVs ― were consolidated into two units as an effort to respond to the global slump.
One conspicuous absence on the promotions list was the group's heir apparent Lee.
He will keep his current position as senior vice president at Samsung Electronics.
"It is part of an elaborately-planned strategy," an industry watcher told The Korea Times.
"With the promotions, Samsung is gearing up toward a future-oriented structure that is better fit with Jae-yong's preferences."
However, rumors have it that everything is not going Jae-yong's way with an old hand with the blessing of the senior Lee heavily involved in the process of the two reshuffles.
Also drawing attention was the promotion of Samsung Electronics' chief PR officer Rhee In-yong to leader of the newly-created "Samsung Communication Team," controlling the group's overall PR strategy and execution
"Expanding our footprint in emerging markets and finding next cash cows are important. In line with such strategies, we need to boost our external communication capabilities," a Samsung Electronics spokesman said.
Rhee worked as reporter for MBC television network before being recruited by Samsung and is considered a top lieutenant for the junior Lee.
Meanwhile, Swiss-based Credit Suisse (CS) brokerage was positive about the reshuffle.
"We maintain a 'hold' rating on Samsung Electronics," CS wrote in a memo to clients.
Samsung Group, which accounts for roughly 20 percent of Korean exports, has 59 affiliates and employs 250,000 worldwide.