Restructuring
The Samsung Group is renovating itself at a fast pace. First of all, it is expected to reduce the number of promotions by at least 30 percent late this year, and carry out executive performance evaluations for this year in Nov., earlier than in previous years. The Samsung Group has continued to reduce the number of those promoted to executive positions for years, from 501 to 485 between 2012 and 2013, and then to 475 and 353 in the following years.
Some employees are predicted to be asked to leave the company as well. Samsung Electronics could maintain substantial operating profits last year and in the first half of this year, in spite of a decrease in sales, because of cost reductions. It is likely to show them the door in this context.
The possibility of additional inter-subsidiary M&As is still open. Those working for the construction business unit of Samsung Heavy Industries are expected to be relocated to Samsung C&T, while rumors are continuing to circulate that the construction and resort divisions of Samsung C&T will be combined with each other. It is also said that a merger between Samsung Engineering and Samsung Heavy Industries is a matter of time. A merger between Samsung Electronics and Samsung SDS or Samsung Medison and Samsung Electronics’ spinoff have been mentioned several times, too.
In addition, the group is mulling over the relocation of its financial subsidiaries such as Samsung Life Insurance and Samsung Fire & Marine Insurance to its headquarters in Seoul, while moving the main office of Samsung Electronics to Suwon City. “It seems that this plan mirrors Vice Chairman Lee Jae-yong’s blueprint for seeking new opportunities while concentrating on electronics and finance rather than construction, shipbuilding, and the like,” said an industry insider.