Tensions high at Samsung as annual performance review nears

THE NEXT few weeks are a tense time at Samsung as executives wait to see if their work is rewarded at the firm’s annual performance review.

This year, that tension has been ramped up as the yearend ritual comes on the heels of the debacle over Samsung’s flagship Galaxy Note 7.

The world’s top smartphone maker this month pulled the plug on the almost $900 (R12 618) device after phones overheated and caught fire. Samsung forecast a $5.4 billion hit to its operating profits. Analysts predicted the smartphone business might post a first quarterly loss for the July to September period.

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

None of the Samsung employees Reuters talked to for this article wanted to be named as they were not authorised to speak to the media.

Nervousness

Samsung’s annual personnel decisions are a secret more closely guarded than even the details of its new products.

Samsung insiders said there was more nervousness this year than normal, and talked of sweeping changes.

Samsung told Reuters it was not considering any management changes or restructuring in response to the Note 7 crisis.

The frustration among staff was heightened by the firm’s inability to find the cause of the fires in the replacement Note 7s, insiders said. “We are working around the clock to analyse the causes of the reported cases,” Samsung said.

In an internal October 11 email apologising to staff, mobile chief Koh Dong-jin wrote of the “big wound” the scrapping of the Note 7 would be for executives and employees.

Investors and analysts said top executives, including Koh, might be held responsible at the year-end review.

About 70 percent of Samsung’s more than 325 000 employees work outside South Korea. It is not clear how overseas jobs or those at subsidiaries may be affected.

Internally, the firm has been criticised for changing product specifications without delaying launch schedules. – Reuters