Samsung Electronics' mobile boss and co-CEO Jong-Kyun Shin will keep his post despite recent downturns in the company's smartphone business, Samsung said in the conglomerate's annual management reshuffle announcement.
There were rampant speculations of Shin being possibly ousted as CEO due to Samsung's mobile business profit drop in the second and third quarters. Samsung's third-quarter profit plunged 60 percent to 4.1 trillion won ($3.9 billion), its lowest in three years, due to rising challenges from Chinese company Xiaomi in the low end and arch-rival Apple in the high end.
"President [and co-CEO] JK Shin contributed substantially to Samsung Electronics becoming global mobile No. 1," June Lee, head of communications at Samsung's Future Strategy Office, told ZDNet Korea during Samsung's official announcement on CEO and president reshuffles at the company's headquarters in Seoul. "We believe that [he now has] the opportunity to attempt a new leap forward in this changed [external business] environment."
Samsung has a total of 55 affiliates, each with its own CEO, with the exception of Samsung Electronics, which has three co-CEOs — Shin for oversees mobile, BK Yoon for consumer electronics, and Kwon Oh-hyun for semiconductors — with numerous more presidents under their supervision.
Last week, Shin accompanied Samsung vice chairman and heir-apparent Jay Y Lee in a trip to Japan to check on operations there, likely due to falling market share, which many read as a sign that the top brass still has faith in the mobile boss' leadership.
Samsung chairman Lee Kun-hee, 72, is currently hospitalised following a heart attack in May, and this was the first annual reshuffle under the supervision of his son Jay Y Lee. Many local market watchers read the annual reshuffle as a sign that the younger Lee is choosing stability for now over a possible radical leadership change that may occur sometime later.
"Jay Y Lee's deference towards his father and the current restructuring drive has made Samsung's top brass opt for stability," said a senior Samsung executive, who declined to be named.
Samsung is in the middle of a group-restructuring plan to streamline its businesses to focus on electronics, finance, and construction. It recently announced that it will be selling its defence business for $1.7 billion to compatriot Hanwha.
Following the IPO of its IT service affiliate Samsung SDS last month, it will do the same with another with Cheil Industries, the group's de facto holding company, to secure cash to pay for the younger Lee's inheritance tax, which will be around $5 billion.
On whether the younger Lee will be named the official chairman of South Korea's largest conglomerate anytime soon, June Lee, head of Samsung's communication, said, "Considering the chairman's hospitalisation, it is inappropriate to discuss that right now."
Meanwhile, Samsung announced that it is "mulling over how to improve" the company's Media Solution Center (MSC), its content and software making division. Hong Won-pyo, who headed MSC, has now been named the head of global marketing strategy, and the leadership post is now vacant at the centre.
The South Korean tech giant denied speculations that it is planning to disband the MSC altogether, hinting at a possible reorganisation of the ill-performing division. Mobile healthcare and enterprise will take precedent over the MSC, sources directly involved in the matter said.
Samsung also promoted Kim Hyun-suk, head of Samsung's TV business under the consumer electronics division, to president from vice president for contributing to the company's ninth straight top place in global TV market share. Together with co-CEO Yoon, he is leading the charge in preparing QD LCD TVs for next year.
Jun Young-hyun was promoted to head Samsung's memory business for his role in company's high operating profits for the year in semiconductors — $2.1 billion in the third quarter — and will be tasked with securing the South Korean tech giant's No. 1 place in the sector, Samsung spokespersons told ZDNet Korea.
A second round of reshuffle announcements on mid-level executives is expected sometime soon, a Samsung spokesman said.
Source: ZDNet Korea (zdnet.co.kr)