Dell, Cisco undergo tough times
Foreign firms restructuring businesses here
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Dell Korea CEO IBM Korea CEO Kim Kyung-duk Shirley Yu-Tsui
y Kim Yoo-chul
Major global corporate giants, such as Dell, CISCO and IBM are speeding up their moves to retool their businesses here in a bid to survive the tough business environment caused by the prolonged economic slump and heated competition.
They are mainly embarking on overhaul measures such as streamlining operations and major managerial changes.
These moves have become necessary survival mechanisms in the light of the withdrawal of corporate giants such as Motorola Mobility and Yahoo from the Korean market.
Dell said Tuesday that it appointed Kim Kyung-duk as its new head of the Korean operation replacing Peter Marrsto to bolster its presence in the lucrative business-to-business (B2B) segments.
The replacement is part of Dell’s efforts to restructure its global operations. Dell’s stock has plunged over the past year as PC sales have slumped thanks to the growing popularity of smartphones and tablet PCs.
``We think Kim is qualified to expand Dell’s new businesses to enterprise clients,’’ the company said in a statement.
Kim joined Dell in 2011 as a senior executive. Since then, he’s been handling the company’s cooperate clients. He previously worked for CISCO for 11 years before joining Dell.
``Dell is experiencing tough periods as its traditional businesses fail to generate sufficient revenue. Restructuring and more business alignments will follow soon,’’ said an official from Samsung Electronics, which is one of Dell’s important business partners, by telephone, Wednesday.
CISCO Systems (CISCO), the world’s leading provider of data networking equipments and software, is also restructuring its Korean unit. Its country manager recently left the firm due to poor business performance.
The California-based outfit recently fired some senior-level Korean executives.
``The CEO position in Korea is still vacant. As CISCO plans to expand its businesses to newer markets such as Web-based collaboration, data center servers and video conferencing, more restructuring will come soon,’’ said an inside source, asking not to be named.
He said Jaime Valles, the president of Asia-Pacific, Japan and Greater China, is still closely analyzing the reasons for CISCO’s dwindling fortunes in Korea before applying new updated business strategies.
``CISCO’s solutions caused many technological errors and failures. Despite such setbacks, CISCO is still asking us to pay more in return for using its unproven systems,’’ said another official from Samsung at the Korean firm’s main technology compound in Suwon, in the outskirt of Seoul.
A CISCO spokesperson in Korea declined to comment.
CISCO established a joint venture KCSS with KT for ``smart city’’ projects. It invested heavily in building a global research center inside the Incheon Free Economic Zone (IFEZ), however, the ambitious projects failed to yield any visible returns, according to government officials.
``CISCO dispatched an audit team to Korea to find out any monetary errors and Valles recently met with its strategic clients and had separate meetings with CISCO employees to seek ways for a business turnaround,’’ said officials who are involved with the matter.
Another global player IBM plans to cut the number of its workforce by as much as 200 in its Korean unit, according to sources. IBM representatives weren’t available for comments.
``As IBM is shifting its main business focus toward system integration-related businesses, the company has notified some employees and executives about plans to end their contracts. This is a part of a group-wide restructuring initiative,’’ said one official.
IBM named Chinese computer engineer Shirley Yu-Tsui as new president of IBM Korea to improve its tainted image and offer customized services to its local enterprise clients.
Market observers say that Yu-Tsui is familiar with the ``unique situation’’ in the Korean market and customers, meaning her leadership will ensure the company’s sustainable growth.