Posted on 02/02/2016 9:31:58 PM PST by Swordmaker
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Samsung Electronics sales and general management costs; R&D costs (won)
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Now many executives with the company are saying the vision is no longer realistic. Samsung has recently been cutting staff numbers and reducing marketing and other sales costs. Many observers are saying Samsung Electronics vice chairman Lee Jae-yong has opted for "managing the situation" since taking over the reins from his father, group chairman Lee Kun-hee, after the elder Lee's health failed in May 2014.
According to electronic disclosure data provided on Jan. 28 by the Financial Supervisory Service, Samsung Electronics staff numbers stood at 98,557 as of 3Q15 in the wake of restructuring efforts last year. The number, down by 1,000 positions from the year before, is now expected to drop further.
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Samsung Electronics staff and average salary
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"What can we do? The company is in trouble," said a senior Samsung executive recently.
Costs are also being cut. Sales and general management costs for 2014 stood at 52.9 trillion won (US$43.8 billion); last year, they were down by over two trillion won to 50.76 trillion won (US$42.0 billion). Research and development spending dipped from 14.39 billion won (US$11.9 million) to 13.71 billion won (US$11.4 million).
Sales have been sliding for two straight years since peaking at 228.69 trillion won (US$189.3 billion) in 2013. But many analysts say the company has failed to come up with a clear path to turning its low growth around.
Growth has also been slack for five "future growth drivers" announced in 2010: solar cells, car batteries, LEDs, bio-pharmaceuticals, and medical equipment. The company did move in Dec. 2015 to set up a new electronic device project team, but its decision was one competitors had already made. The bio industry area, which it touted as a source of future growth at the time of the Samsung C&T and Cheil Industries merger, has been similarly weak. An anticipated NASDAQ listing in the second quarter for Samsung Bioepis, which develops new bio-pharmaceuticals, has been postponed, while a patent dispute has erupted with the US company Amgen.
"When you're facing a crisis, your first priority may just be survival. Our plan is to watch the market situation closely as 'fast followers' rather than 'first movers,' and then go about investing when the opportunity is there," said a senior Samsung source.
The "situation management" style of leadership has drawn criticisms from some observers.
"Since Lee Jae-yong took over, [Samsung Electronics'] interest has solely been in buying up companies that it can take advantage of," said a Seoul National University professor who asked not to be identified.
"Because of failures within Samsung itself, they’ve neglected to build their own basic competitiveness through experience," the professor added.
A securities company analyst, also speaking on condition of anonymity, noted the difference in the company from when Lee Kun-hee was leader.
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Samsung Electronics performance (trillion won)
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"Today, you don't see anyone looking for or talking about the way forward. It's just managers left," the analyst said.
Another source of concern has been the company's "selection strategy" of selling off affiliates that are considered less essential.
"In the 1990s, Sony restructured its electronic sector because of the deficit it had racked up, and it focused instead on more profitable financial and film and music projects. It ended up losing cutting-edge technology and key talent from its restructuring in electronics projects, which accounted for 70% of its total sales," said Kim Hyun-chul, a professor at the Seoul National University Graduate School of International Studies.
"Samsung is going to need to cut costs, but it also has to work to find markets for new growth," Kim added.
By Lee Jeong-hun, staff reporter
Yeah where are all the damn 3d tvs everyone was working on?
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My phone (Samsung Galaxy Note2) is four years old.
I might need to replace it this year, but Samsung dropped replaceable batteries and MicroSD slots. I am a power user. Their current units are insufficient for my needs.
Dropping out of the power user market is probably what caused the drop, since if you look at it as a percentage it isn’t that huge a drop.
Did the amount they saved in expenditures meet or exceed the revenue drop?
How do you spell Samsung? Sony.
3d tv’s are physically the same as 2d but with a few more lines if code.
Samsung ate sony’s lunch
I have the galaxy sii. was going to get microsoft 950 but reviews are mixed
Compare AT&T or Sprint version reviews with reviews for the unlocked international version.
The lock up problems with the 950 seem likely to be caused by carrier installed bloatware.
Following the path Nokia Mobile Phones took. Nokia is still around, they just don’t make phones any longer.
I agree I will probably buy new ph in next year but won’t buy a ph that the battery cannot be easily remove and replaced with a charged one. Same with no microSD slot. Samsung won’t get my biz.
I did just buy a Samsung 10.5 Tablet though. Has USB port and it is for home so charging is fine when battery is low.
And the flexible roll-up screens. I thought Samsung excelled in that area and would make billions there. Their curved big screen TVs are amazing. The next thing was going to be flexible paper-thin screens on everything.
Ed
Plasma screens are energy wasters and deteriorate after a few years. The latest tech beats them in both energy usage and brightness, without putting out much heat.
Microsd went away in part due to Google’s decisions within previous versions of Android os. Google has reenabled the easy use of micro sd, so we might see a resurgence of inclusion. The coming Samsung Galaxy S7 will supposedly include again.
Replaceable batteries are probably a thing of the past within the next two years, though I cling to them with a fury.
The super thin, flexible screens are coming soon enough. Samsung and LG have shown them repeatedly.
LG just showed on that you can roll up in a tube for shipping. It attaches to a credit card thick magnetic frame on the wall. There is YouTube video of the demo girl peeling it away from the frame and bending it. Pretty cool.
Samsung Note 5 is amazing. I don’t usually get excited about phones but what this thing does is amazing. The pen is like magic. Amazing really. And the screen colors blow away even the newest Apple phone ...that was confirmed by a room full of IPhone lovers that noticed the vivid display. One asked if it was the new iphone.
The only thing that can make replaceable batteries a thing of the past is a concept called brand loyalty being universally embraced.
I don’t think that is possible.
Great picture, when it worked.
3 lamps, two color wheels, faulty circuit board in 3 years. ( Oh, we don't support that model anymore. Maybe you could find the part on the internet somewhere)
Samsung = Samsuck!
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