Samsung's mobile chief may lose his job as the Note 7 scandal continues

Recently, Bloomberg News reported that the Galaxy Note 7 incident dealt a heavy blow to Samsung Electronics , and the company's mobile division was undoubtedly the first to bear the brunt. The mobile division, which was once "invincible" within Samsung Electronics, not only faces the serious consequence of losing its bonus, but its department head may even lose his job. The following is the summary of the article.

The workers who make Samsung phones are part of the company's elite group, occupying the most coveted jobs at Samsung Electronics, the most valuable company in the Samsung Group, South Korea's largest and most prestigious conglomerate.

However, this sense of superiority suffered a heavy blow last week when Samsung Electronics' flagship smartphone Galaxy Note 7 was permanently discontinued. Not long ago, the 26,600 Samsung Electronics employees responsible for mobile phone products celebrated for pushing the company's profits and brand to new heights, but now they need to be responsible for the most serious crisis in Samsung Electronics' 47-year history. In the eyes of Samsung Electronics employees, a solemn atmosphere has enveloped them, and the Galaxy Note 7 incident is undoubtedly a tragedy.

Samsung Electronics said that the Galaxy Note 7 incident will cost the company more than $5 billion, and the mobile phone division will undoubtedly be hit hard. This division used to receive the most bonuses in the Samsung Group, usually half of the basic salary, but now it seems that they may not get a penny of bonus. Some senior executives may lose their jobs, including DJ Koh, who was promoted to head of the mobile division at the end of last year.

"The mobile division has always stood head and shoulders above the rest, but they may have created the worst corporate recall case in business school textbooks," said Kim Young-woo, an analyst at SK Securities.

Samsung Electronics, which declined to comment on salaries, bonuses and potential layoffs, said in a statement: "Our focus right now is ensuring all remaining Galaxy Note 7 units are recycled to ensure the safety of our valued consumers."

Samsung Electronics launched the Galaxy Note 7 in August but recalled the first batch of 2.5 million units in September and had to recall them again this month because the replacement units still had safety issues.

Samsung Electronics is facing a crisis at a time of transition at the company. Samsung Group Chairman Lee Kun-hee has been hospitalized for more than two years after a heart attack, and his son Jay Y. Lee, heir to the chaebol, has not been able to take his place because of Korean tradition. Samsung Group is currently led by a management committee that includes Lee and co-vice chairman GS Choi.

The rise of smartphones

For many years, the mobile phone division was just one of several important divisions under Samsung Electronics, with a status equal to that of semiconductors and TV divisions. However, as the smartphone era arrived and the company became the industry leader, the mobile phone division's revenue contribution increased from 27% in 2010 to 61% in 2013.

The change transformed the internal structure of Samsung Electronics. Suddenly, the employees who made mobile phones became big customers of other divisions, buying large quantities of chips, panels and other components. Every division saw a sharp increase in profits.

The attitude of the mobile division employees has also changed. They behave more like bosses. Because they have the upper hand in bargaining power, they often urge other employees to speed up the progress. The income and bonuses of mobile division employees are better. In 2014, JK Shin, then head of the mobile division, received a bonus of 12.8 billion won (about 11 million U.S. dollars), which is at least 75% higher than other supervisors. In the past two years, Samsung Electronics' mobile division has begun to decline, and employees are still complaining that they have received less than 50% of their previous bonuses.

“The mobile division is the boss inside Samsung Electronics,” said Chang Sea-jin, a professor at the National University of Singapore.

Samsung Electronics denied that its mobile division had more power than other divisions. "Samsung Electronics manages its supply chain based on the principles of fairness and transparency, and actively supports suppliers to establish long-term partnerships with them," the company said in a statement.

Damage to reputation

Samsung Electronics' once-proud reputation has taken such a heavy blow that employees in the mobile division are reeling from feeling they have lost their jobs, according to several employees who agreed to discuss the current atmosphere and morale at the company on the condition of anonymity.

"A lot of people are worried about who is responsible for this incident," said one mobile department employee. "This is not something that can be solved by one person alone. Many people are involved. We all hope that this matter can be resolved and forgotten."

Another employee from the mobile division said: "It's definitely a sad and humiliating moment. Everywhere I go now, people ask, 'Is everything OK? I heard Samsung is in big trouble.' It's a serious lesson for sure."

Employees outside the mobile division are angry because the actions of a few people caused the company to suffer a huge blow. They hope to take proactive measures to prevent such incidents from happening again, especially if they are forced to meet unrealistic deadlines.

An employee from the components division said the mobile division needed to be aware of its limitations and must be extra cautious in the future.

"We are firmly committed to finding and resolving the issue and taking all necessary steps to ensure this never happens again," Samsung Electronics said in a statement.

Samsung Electronics employees are trying to stay positive about the future. They are relieved that the Galaxy Note 7 had been well received by the industry before the quality issues broke out, and they firmly believe that they can come out of the shadow of this crisis.

"If we can fix this in the next phone, we'll be able to move on from the Galaxy Note 7 incident," said one employee from the mobile division. "If we can't, we won't have another chance."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.