Foreigners Were Expected to Excel, but Sales Dropped by 40 Trillion Won... Samsung Electronics Also Considering Overseas Subsidiary Head Reshuffle

Samsung Overhauls Global Network
Currently Operating 563 Overseas Subsidiaries
Last Year's Sales Down 40 Trillion Won in One Year
Strategy Shift to Prioritize Local Talent
"30% Reduction in Overseas Business Unit Staff"
Foreign Media Also Mention Efficiency Improvement
Regular Personnel Changes Likely Early This Month
Attention on Lee Jae-yong's Crisis Overcoming Message

Samsung Electronics is expected to undertake a major personnel overhaul of its overseas subsidiaries and reorganize its global network. This move is interpreted as a response to the need to improve operational efficiency at overseas business sites and to respond swiftly to market changes amid crises in key businesses such as semiconductors.

According to the business community on the 1st, Samsung Electronics is considering replacing the majority of executives and employees at its overseas subsidiaries in the regular personnel reshuffle scheduled for this month. Currently, Samsung Electronics operates 563 overseas subsidiaries worldwide, and many personnel changes are expected in this round of reshuffling. In particular, changes are anticipated in the lineup of foreign subsidiary heads. Samsung Electronics has been appointing foreign talents familiar with local cultures and markets to lead its overseas subsidiaries, but due to underwhelming performance on the ground, it appears the company is seeking new strategies.

Life Lintner, CEO of the Berlin International Consumer Electronics Fair (IFA) and a former Samsung Electronics employee for about 15 years, recently told reporters, "The majority of executives and employees at foreign branches are locals, but there are some questionable aspects regarding their capabilities," which is interpreted as aligning with Samsung Electronics’ own assessment.

If the executives leading overseas subsidiaries are extensively replaced, Samsung Electronics’ global network will effectively be restructured. According to recent major foreign media reports, Samsung Electronics is expected to reduce its overseas workforce by up to 30%. The company plans to downsize overseas operations to cut costs while increasing business efficiency.

The biggest reason behind this decision is reportedly the sluggish overseas sales. According to Samsung Electronics’ first half report this year, sales in the Americas, Europe, Asia-Africa, and China are expected to decline from approximately KRW 189 trillion in 2022 to about KRW 149 trillion in 2023, indicating a downward trend. Although the company performed relatively well with about KRW 93 trillion in sales in the first half of this year, the outlook for the second half is pessimistic due to unfavorable domestic and international market conditions, making it uncertain whether sales will match last year’s levels. When Samsung Electronics was thriving in the past, overseas sales accounted for about 70% of total sales, making them very important to the company. Additionally, business, production, and sales conducted overseas significantly influence attracting foreign investors in the stock market. Given Samsung Electronics’ recent need to boost its stock price, it is under pressure to perform better. The upcoming U.S. presidential election on the 5th of next month, which could introduce variables, is also believed to be a factor prompting Samsung Electronics to reorganize its overseas operations.

It is rumored that Samsung’s regular personnel reshuffle could be implemented as early as the beginning of this month. The business community expects the scale of the reshuffle to be very large. Even on the 27th, when Samsung Electronics Chairman Lee Jae-yong marked his second year in office, he did not issue a separate message, which has heightened interest in the personnel measures. There is a strong possibility that through a sweeping personnel reshuffle, Chairman Lee will demonstrate his determination to overcome the company’s crisis.