Nikkei reported, Samsung Electronics has just replaced all executives and reduced the company structure into two business divisions. This is said to be a move made by Vice Chairman Lee Jae-yong to reposition the company to deal with an increasingly competitive global business landscape.
Specifically, the Korean company on Tuesday announced Kyung Kye-hyun, the head of Samsung Electro-Mechanics, has been appointed as the CEO of Samsung’s device solutions division, which focuses on semiconductors. guide.
Han Jong-hee, who leads the company’s TV business, was appointed CEO of the post-merger division of the consumer electronics and mobile (including smartphones, TVs and Other devices). The company now has two executives instead of three as before.
This is the first organizational and administrative reshuffle since “prince” Lee was released from prison in August after the government pardoned it in the “interest of the nation”. The fact that Crown Prince Lee received the nod to freedom clearly shows the importance of Samsung to the Korean economy. By the time he was released, Mr. Lee had served more than half of his 30-month prison term for bribery and embezzlement.
The announcement of the reorganization comes at a time when Mr. Lee is largely expected to maintain the status quo of the executive suite, considering the company’s recent stellar business performance. Samsung’s operating profit jumped 40% in the first three quarters of this year from the same period in 2020 thanks to surging demand for memory chips and smartphones.
The third-generation leader of the Samsung family is following in the footsteps of his grandfather, the founder of the group, and his father, who turned Samsung Electronics into a global conglomerate. Analysts say Mr. Lee is trying to set a new direction in the context of internal and social calls for business transformation.
CW Chung, a senior analyst at Nomura, said: “Samsung has been struggling for some time to resolve complaints related to personnel and compensation. The reshuffle could bring a breath of fresh air to the company. company as well as stimulate employee morale.
Younger Samsung employees have lobbied for a raise, and lawmakers and civic groups have long pressed for more transparency in how Samsung and its companies operate. other family-controlled chaebol conglomerates.
Mr. Chung also said that Crown Prince Lee’s recent business trip to the US may have influenced his decision to act because he mentioned worries about the market realities facing the company. Lee met with senior White House officials, Google CEO Sundar Pichai and other business leaders.
Samsung and other major companies are dealing with shortages of key manufacturing components, including semiconductors. Supply chain failures began to plague the global economy during the Covid-19 pandemic as demand for electronic devices surged while blockade orders were put in place to prevent the spread of the disease.
The competitive environment faced by Samsung is also becoming increasingly harsh as computer chip makers, including Taiwanese rivals, scramble to meet demand. Meanwhile, for smartphones, Xiaomi has overtaken Apple to become the world’s second largest manufacturer. The Chinese company said in August that it aims to surpass Samsung in three years.
Talking about this reorganization, Samsung said: “With this reorganization, we expect the company to overcome uncertain business situations and focus on the future, leading the global market.” demand as a leading company”.
A Samsung representative acknowledged to Nikkei that Mr. Lee was the driving force in the restructuring of the organization and in the appointment of new CEOs, but did not elaborate.
In addition to competition risks, Mr. Lee continues to face legal troubles. He now appears in court every Thursday as prosecutors pursue charges that he was involved in stock market manipulation and accounting fraud during the merger of two Samsung affiliates in 2016. 2015. Lee denied the allegations. A ruling is expected to be made next year.
South Korea’s upcoming presidential election is another cause for concern for Samsung.
Yoon Seok-youl, the candidate of the People’s Power Party, who played the main prosecutor role in pointing out Mr. Lee’s wrongdoings. As for Lee Jae-myung, the candidate of the ruling Democratic Party last month, announced at a press conference with foreign media that if he were president, he would have zero tolerance for the wrongdoing of politicians. chaebol family.