IBM Korea chief faces dismissal
By Kim Yoo-chul
Jeffrey Rhoda
IBM is expected to dismiss the head of its Korean subsidiary, holding him accountable for the continued decline in sales, industry sources said.
“It’s highly likely that IBM Korea General Manager Jeffrey Rhoda will be replaced with a Korean successor,” said one official who is familiar with the issue, Monday.
He said Rhoda appears to have been more focused on expanding dividends to its headquarters over boosting Korean business.
IBM Korea’s senior executive Kim Won-jong is one of the strongest candidates to replace him, sources said.
Kim is well-versed in mainframe-related businesses, a key revenue channel for IBM Korea, and has proven his ability to manage Korean staff members, said another source.
Rhoda is the replacement of Shirley Yu-Tsui after Yu-Tsui had been let go from the position for failing to regain trust from local customers. Yu-Tsui moved to the CEO post of Visa China.
“If IBM Korea completes the ongoing restructuring process, then Rhoda will step down from the position and be given a new role in another country,” the officials said.
IBM headquarters had considered naming a non-Korean as the possible replacement of Rhoda. But as the candidate is still young, the senior executive Kim has emerged as the next IBM Korea chief, said the officials.
IBM Korea posted 47.8 billion won in net profit last year, down from 115 billion won the previous year, according to data from financial regulators.
The weak performance pushed IBM Korea to cut the number of its employees.
Still, IBM Korea transferred 117 billion won in dividends to its headquarters. Its dividend ratio to profits was 245 percent.
IBM Korea is wholly owned by IBM Korea Holdings. As IBM headquarters controls its Korean office, IBM Korea sends dividends to the headquarters through IBM Korea Holdings.
By 2014, the number of IBM Korea’s employees stood at 2,242, down 10 percent from a year earlier.
“IBM seeks to transfer more money to its headquarters, and its regional chiefs are more focused on increasing dividends,” said the officials.
They said the Korean candidate, if appointed as CEO, is expected to improve its business given his track record of handling major banks and government agencies.
Government agencies in Korea are cutting their reliance on IBM’s mainframe systems, shifting toward a cheaper UNIX-based IT system.