Going against rampant speculations, Samsung Electronics decided to keep the head of its underperforming mobile business in his position.
J.K. Shin will continue to be the head of Samsung's mobile business even after plunging smartphone sales that have contributed to the company's worst reported earnings in a period of three years.
Samsung employees have been nervously waiting for the final announcements on reshuffles, as jobs could be cut from the move. Previous reports stated that Shin, who is also a co-CEO of Samsung, could lose his position after the recent tumble of the company's smartphone business.
However, that was not the case, as Shin was able to keep his position.
Kwon Oh-hyun, the head of Samsung's semiconductor business, and Yoon Boo-keun, the head of Samsung's consumer electronics business, were also retained in their positions.
According to analysts, Jay Lee, the only son and the likely successor of Lee Kun-hee, the ailing patriarch of the Samsung Group, decided that the company will move forward with the people that his father appointed in key positions. The decision will make sure that Samsung remains stable as it moves forward to address its current challenges while also consolidating his position within the company.
According to Chung Sun-sup, the head of research company Chaebul.com, the major changes that Samsung is currently going through amid the process of succession, such as listing units and selling affiliates, will lead to too much disorder if there would also be a leadership change.
"And without a signal that Chairman Lee Kun-hee has stepped back for good, it might have been too much for Vice Chairman Jay Y. Lee to change the people his father put in position," he added.
Park Ju-gun, the head of corporate watchdog company CEO Score, said that the junior Lee might require more time to strengthen his position in Samsung, which is the biggest conglomerate in South Korea.
According to Park, replacing key management officials would have been too big of a risk for him, especially as his father is still recuperating from a heart attack that occurred back in May.
According to Lee June, the senior vice president of the conglomerate, Shin proved to be a significant contributor to the emergence of Samsung as the dominant global brand in the smartphone industry. As such, Shin was granted the chance to reverse the decline of the smartphone division of Samsung.
Samsung's smartphone division has been challenged by low-cost smartphone manufacturers such as Xiaomi in the lower end and by Apple in the upper end. This has caused the company's market share in the smartphone industry to decrease year-on-year for the previous three quarters.
