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(LEAD) Samsung may start personnel reshuffle this week

All Headlines 11:42 January 19, 2020

(ATTN: ADDS more details in last 6 paras)

SEOUL, Jan. 19 (Yonhap) -- South Korea's top conglomerate Samsung Group may start carrying out a personnel reshuffle at key affiliates this week, industry watchers said Sunday.

Usually, Samsung has announced personnel reshuffles in December, but the personnel appointments were delayed as trials involving the group's heir Lee Jae-yong and key executives have been dragged out longer than initially expected.

The heads of Samsung Electronics Co.'s key business divisions remain in place.

According to the sources, Kim Ki-nam, president of Samsung's device solutions division; Kim Hyun-suk, president of its consumer electronics division; and Koh Dong-jin, chief of Samsung's mobile business division, are likely to retain their posts.

But chiefs at non-tech affiliates, including Samsung Life Insurance Co., may be replaced, they said.

(LEAD) Samsung may start personnel reshuffle this week - 1

After posting record-high earnings in 2017 and 2018 on the back of the memory chip boom, Samsung suffered a slump last year due to weak chip prices and demand, aggravated by a protracted trade war between the United States and China. Japan's imposition of tougher regulations on the export of high-tech materials to South Korea complicated its supply chain and business outlook.

Besides the external business risks, Samsung is facing challenges from lingering legal battles surrounding the 51-year-old scion Lee.

In last August, South Korea's top court ordered a review of a suspended sentence for Lee in a bribery case that led to the ouster of former President Park Geun-hye.

Lee was put behind bars in 2017 after receiving a five-year jail term but was released in 2018 after an appeals court halved his original sentence, which was suspended for four years.

Though the son of hospitalized Samsung Group Chairman Lee Kun-hee controls only a fraction of the shares at arguably the most important company in corporate Korea, the owner family has played a critical role in shaping Samsung's corporate vision and approves major strategic decisions.

Samsung has also faced growing calls to improve its corporate governance and transparency to dispel the association with corruption cases and reduce risks related to the owner family.

Lee Jae-yong, Samsung Electronics' vice chairman and heir of South Korea's largest conglomerate, heads to the Seoul High Court on Oct. 25, 2019, to attend the first retrial of a bribery case linked to former President Park Geun-hye and her confidante. (Yonhap)

Earlier this month, Samsung delivered market estimate-beating fourth-quarter earnings on a slight recovery in chip prices.

The world's No. 1 memory chipmaker estimated its fourth-quarter operating income at 7.1 trillion won (US$6.1 billion), down 34.26 percent from a year earlier, but the reading was well above the median market estimate of 6.5 trillion won, largely on the back of a slight recovery in chip prices and better-than-expected market response to its smartphones.

The Korean tech giant expected fourth-quarter sales of 59 trillion won in the three-month period, down 0.5 percent on-year. The fourth-quarter sales estimate stood at 60.5 trillion won on average.

For all of 2019, Samsung predicted its operating profit to be 27.71 trillion won, marking a 52.9 percent on-year drop and the lowest since 2015, when the comparable figure was 26.4 trillion won.

Full-year sales are expected to reach 229.52 trillion won, a 5.8 percent fall from 2018, the tech giant said. It is the lowest level since 2016, when the comparable figure was 201.8 trillion won.

Samsung Electronics will announce the detailed earnings later this month.


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