Samsung is reportedly planning to restructure its management in an effort to recover from a 49 percent drop in its third-quarter earnings.
People familiar to the matter told the Wall Street Journal that co-chief executive and mobile head J.K. Shin will be moved out of the role and will be replaced by head of home appliance and television division, B.K. Yoon. This doesn't mean a major promotion for Yoon though, as he will be taking over the division in addition to his current role. Meanwhile, Kwon Oh-hyun will keep his position in the company in the semiconductor and display panel business.
The sources clarified that the decision is not yet final.
"A large-scale leadership change at the mobile division may come," Chung Chang Won, an analyst at Nomura Holdings Inc. in Seoul, said to Businessweek. "The top leadership who misstepped in the mobile business will have to pay the price."
A Samsung spokesperson declined to comment about the leadership restructuring and other details regarding the annual performance review of its managers.
The South Korean smartphone maker is already feeling the competition brought by other low-cost smartphone makers, including Xiaomi and Lenovo. Analysts predicted that it won't be long before these two competitors catch up.
Last week, Samsung's head of investor relations Robert Yi announced that the company would be cutting its number of smartphone models by 25 to 30 percent for 2015 to reduce costs. The cut would allow the company to organize its inventory and supplies. According to market research analyst IDC, Samsung is still the leading smartphone brand worldwide, but its shipments continue to decline year after year.
Samsung entered a partnership with BlackBerry to expand each other's mobile security technology and drive sales from more business customers.