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At crisis-hit Samsung, nerves jangle as annual evaluation looms

At crisis-hit Samsung, nerves jangle as annual evaluation looms

At crisis-hit Samsung, The next few weeks are historically a stressful time at Samsung Electronics Co (005930.KS) as executives wait to see if their work over the year is rewarded with advertising on the South Korean company’s annual performance evaluate.

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The logo of Samsung Electronic is seen at its headquarters in Seoul, South Korea, July 4, 2016.

This year, that anxiety has been ramped up several notches as the year-end ritual comes on the heels of the debacle over Samsung’s flagship Galaxy be aware 7 phone.

the world’s top smartphone maker this month pulled the plug at the near-$900 device after phones overheated and caught fire. With a few substitute telephones suffering the identical trouble, Samsung has forecast a $5.4 billion hit to its operating income. some analysts expect the phone commercial enterprise can also submit a first quarterly loss for July-September.

“absolutely everyone’s afraid to be heard even breathing,” said one Samsung worker. “There can be punitive measures;someone will have to take responsibility for this.”

none of the Samsung employees Reuters talked to for this text wanted to be named as they were not authorized to speak to the media.

Samsung’s annual employees selections – a common practice in South Korea around December – is a mystery greater carefully guarded than even information of its new merchandise. Executives are instructed approximately any modifications best at the last minute.

Samsung insiders say there’s greater anxiety this 12 months than ordinary, and communicate internally of sweeping adjustments, with a cull both inside the executive suite and on the ground stage.

“there may be a variety of speak there will be most important turnover inside the executive ranks on the hardware side,”said an insider at the mobile division. “there’s additionally lots of issue a number of the working-level employees about a chief restructuring.”

Samsung told Reuters it became not thinking about any control adjustments or restructuring in response to the note 7 crisis.

 

Frustration

The sense of frustration among Samsung team of workers has been heightened through the employer’s inability to locate the cause of the fires in substitute notice 7s that started out delivery final month with what Samsung said had been secure batteries, insiders stated.

“we’re working around the clock to analyze the causes of the suggested cases,” Samsung stated in a statement to Reuters, including it’s far untimely to take a position on what went wrong.

In an inner Oct. 11 e-mail apologizing to group of workers, mobile leader Koh Dong-jin – who has been in the activity for for much less than a 12 months – wrote of the “big wound” the scrapping of the observe 7 might be for executives and employees. Samsung confirmed Koh wrote to team of workers, but did now not touch upon what he stated.

some Samsung employees said there were already rumors circulating internally about which executives is probably ousted. a few traders and analysts have said pinnacle executives including Koh may be held responsible on the year-end evaluate.

Others said they felt ashamed when people they recognize ditched the note 7 for a rival product or after they heard information announcements about the phones being banned from aeroplanes.

Koh and other Samsung executives had been active on inner messaging forums, discussing with employees how to deal with the note 7 crisis, insiders stated.

about 70 percent of Samsung’s more than 325,000 employees work outside South Korea. It isn’t clear how distant places jobs or those at subsidiaries is probably affected by the note 7 storm; Samsung stated it has no plans to cut jobs this yr in Vietnam, a main phone production base.

 

Taking slow

Internally, the mobile enterprise changed into criticized with the aid of some for changing product specifications without delaying launch schedules, putting staff and suppliers below stress to deliver fast.

“a few people who work in different business divisions experience something like this became sure to take place,” stated a Samsung worker on the client electronics department, noting mounting stress on the cell business to overcomes lowing growth amid strong competition from competitors consisting of Apple Inc (AAPL.O) and Huawei technologies Co Ltd [HWT.UL].

a person familiar with the development of the next Galaxy S phone, expected to release early next year, said the system has now slowed as Samsung is tense to avoid any repeat of the note 7 problems in its destiny premium handsets.

“depending at the cause (of the note 7 problem), certain configurations may want to be altered,” the person stated. “So the specifics for the (next) smartphone have now not been finalised.”

Samsung isn’t possibly to deliver forward the launch of the next Galaxy S phone to make up for lost note 7 sales, the person brought.

Samsung informed Reuters it’ll take “any and all essential steps” to make certain product protection, however did no longer comment on whether or not the word 7 fallout was affecting the subsequent Galaxy S smartphone’s improvement.

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