Samsung Announces Reorg Amid Falling Earnings

Samsung is reorganizing its executive suite following a drop in earnings and the retrial of former leader and Samsung heir Lee Jae-yong, known professionally as Jay Y. Lee, according to reports on Monday (Jan. 20).

Roh Tae-moon was appointed as the new head of Samsung’s smartphone operations, taking over for DJ Koh, who will continue to head up Samsung’s IT and mobile and communication arms. The South Korean technology firm also named four executives as company presidents.

Previously in charge of Samsung Galaxy smartphone development, Tae-moon started with Samsung in 1997 and was recently tasked with expanding the outsourcing of handset assembling.

Samsung makes more computer chips, displays and phones than any other company worldwide, but has seen its earnings drop for the past five quarters. The company is working to create new growth drivers.

Jae-yong served five years in jail on bribery, embezzlement and other offenses in connection with a scandal that brought down former South Korean President Park Geun-hye. Following a successful appeal, Jae-yong is now being retried. The verdict is anticipated in the coming weeks and could result in his return to jail.

“Replacing its smartphone chief has been long overdue, given Samsung’s big mistakes with the Note 7 battery and foldable phone,” Park Ju-geun, head of research firm CEOScore, told the Financial Times. “Samsung has benefited from Huawei’s trouble in network equipment and Apple’s absence in 5G smartphones. So the reshuffle is aimed at making the most of the growth potential in the two areas.”

Korea’s largest company is on a mission to gain traction in 5G and foldables, both expected to be hot topics at Samsung’s Feb. 11 Unpacked event in San Francisco.

Last week, Samsung acquired network services provider TeleWorld Solutions (TWS). TWS will become a wholly-owned subsidiary of Samsung, but will still service existing clients as 5G moves beyond smartphone connectivity.