Samsung reorganizes under handset chief: Korean vendor streamlines operations, more to come

Samsung Electronics Co. Ltd. today delivered a mixed bag of results – strong handset shipments and net profit loss – but it had already taken steps to deal with strength in handsets and weakness in its memory chip and flat-screen TV businesses.
The company announced last week that it had consolidated four divisions – mobile devices, television, computer and other consumer-oriented business – into one headed by the former handset chief, Choi Gee Sung.
Samsung’s memory chip and liquid crystal display businesses – the two divisions showing the most weakness – will operate under a second division led by current CEO Lee Yoon-woo.
Observers said Choi’s rise appeared to reflect that Samsung has moved beyond promoting engineers with technical backgrounds to a more marketing-oriented company.
Choi is credited with steering Samsung’s television business past Sony Corp.’s to become the No. 1 global brand in 2006. Choi took over the company’s global handset division in 2007, driving Samsung to the No. 2 ranking behind Nokia Corp.
Meanwhile, Dale Sohn, president of Samsung Telecommunications America, Samsung’s handset business in the United States, was promoted to executive VP in Samsung Group. (He had been a senior VP.) The promotion was seen as a reward for successfully steering Samsung to the No. 1 position in the U.S., dominated by Motorola Inc. until last year.
And a former handset executive, Chang-Soo Choi, will take over the helm of Samsung Electronics America, from which Dong Jin Oh just resigned.
The company’s third quarter, in which net profits declined 44% year-on-year on poor chip sales and profits, may have driven the management changes, announced just prior to fourth quarter results, which confirmed a trend.
The executive “reshuffling,” as the company called it, affected 25 top executives and is the first since chairman Lee Kun-hee resigned last year in a corruption probe that in April found Lee guilty of tax violations and breach-of-trust.
Samsung has a history of making sweeping executive changes in tough economic times or when its divisions perform poorly. Current changes include cutting executive salaries by up to 20% and cutting employee benefits.
“Age was the biggest criteria in the reshuffle,” said Yoon Soon-bong, Samsung’s chief public relations executive, according to an account on prdomain.com.
“The sweeping reshuffle aims to invigorate the group’s organization following the probe by a special prosecutor,” the company said in a statement, according to prdomain.com. “We have also massively recruited young and creative talents.”
Samsung Group also said Hwang Chang-gyu, leader of the chip division in its best years, and Lee Ki-tae, credited with making Samsung handsets a global brand, would leave prominent positions in management.
Further management changes included the replacement of regional leaders in North America, Europe, Southwest Asia, the Middle East, Russia and former states of the Soviet Union.