Samsung Electronics Restructures, Shifts Execs
Samsung Electronics Friday said it was reorganizing its business into two groups, and parent company Samsung Group announced several management changes.
Samsung Electronics' four businesses will now operate under two umbrellas: Device Solutions, which includes memory chips and LCDs; and Digital Communications, which will house the company's consumer appliances and mobile phones business.
With the management changes, Lee Yoon-woo, Samsung Electronics vice chairman and CEO, will take on the additional responsibility of overseeing the Device Solutions business, while the company's handset president, Choi Gee-sung, is now a vice chairman and will lead Digital Communications.
As part of the management shake-up, vice chairmen Lee Ki-tae, who led the mobile phone business, and vice chairman Hwang Chang-kyu, head of the semiconductor business, have left the company. Altogether, 25 top-level executives at parent company Samsung Group were reassigned, promoted or terminated. The Seoul, South Korea-based conglomerate also cut executive salaries by as much as 20 percent and said employee benefits will be scaled back as well.
Samsung is set to post 2008 fourth-quarter and first-quarter 2009 earnings next week, with many analysts predicting wide losses.
In the prior third-quarter period, Samsung posted a third-quarter loss of 44 percent loss in net profit compared with the same period in 2007.
The company also said DRAM, NAND and LCD businesses all faced steep price declines led by persistent oversupply in the industry.
In the call, Samsung said that prices for NAND chips declined 35 percent from the second quarter and DRAM prices suffered a loss of 17 percent.
Samsung in October also withdrew its unsolicited bid for SanDisk that equaled $26 per share in an all-cash deal. SanDisk immediately rejected the deal, saying it greatly undervalued the company.
Many of Samsung's rivals have experienced similar fallout from the shaky economy. Last month, top competitor Sony slashed 8,000 jobs, or 4 percent of its entire workforce, in reaction to sluggish sales, especially in its television and digital camera product lines.