Home tech Samsung cuts US marketers after the audit

Samsung cuts US marketers after the audit

Samsung Electronics Co. has verified its marketing activity in the United States to investigate whether employees have violated corporate policies in their dealings with business partners, resulting in dismissal of a number of staff members, according to people who are familiar with the situation.

The layoffs and the internal probe are among the broadest changes in the company, including the recent departure of the top US marketing executives, as well as other executives outside the marketing group.

The internal audit of Samsung concerned, in part, the relationships between marketing staff and business partners, such as communication companies and advertising agencies, according to famous people and the measurements they have familiarized with the situation. It is common for marketers to accompany these partners to entertainment events that they sponsor, such as the Super Bowl or the Oscars, or to allow sellers who compete for their business to pay for benefits during meetings, such as a good lunch or a lesson of training.

But these relationships can create a conflict of interest that calls into question whether marketers are directing resources towards the best performing marketing channels, say industry executives.

Samsung declined to comment if it performed an internal audit.

"Recently, organizational changes have been made to our marketing division," the company said in a statement sent by e-mail. "We have a strong management team in the United States that remains focused on continuing to provide our customers in North America with the products and experiences they expect from the Samsung brand."

It is not clear how many workers have been cut or which incidents or activities by the staff have attracted the attention of Samsung. Samsung's total workforce in the United States is over 18,000.

Some members of the Samsung staff were informed on March 15th that they had been fired for cause and without dismissal following the audit, according to the people aware of the matter. Some dismissed employees said they were treated unfairly, and that Samsung's discoveries in some cases were trivial and did not deserve his actions.

The company also conducted a month-long audit of its advertising agency partners, including Interpublic Group of Cos & # 39; s PMK-BNC and R / GA, independent public relations agency Edelman and Publicis Groupe media agency, according to the people who they are familiar with the situation. The audit included a survey on agency operations and practices, such as financing and managing certain projects.

Samsung conducts routine audits of its various departments and internal agencies, according to the people close to the company.

Recent changes in Samsung's operation in the US have included the departure of Marc Mathieu, the head of US marketing, and Jay Altschuler, vice president of media and partnership, according to people familiar with the issue.

Samsung declined to comment on whether these departures were related to its own audit.

"Marc left Samsung Electronics America to pursue opportunities outside the company," a company spokeswoman said last week.

At the time, Mr. Mathieu said: "I had the privilege of leading a talented team of marketing professionals, which led to an incredible growth of the brand during my tenure at the company".

Departures come in a broader realignment at Samsung. In recent months, Samsung has named a new global marketing manager, Stephanie Choi, in her mobile division.

Outside the marketing group, there have been other significant departures in the United States, according to people who are familiar with the issue. Samsung refused to comment on the other managers' departures.

Tim Baxter, president and CEO of Samsung Electronics North America, also announced plans two months ago to retire in June.

In the United States, which represents a significant market for the company's phones, appliances and chips, Samsung Electronics America spent an average of 583 million dollars in 2018, according to Kantar Media, a measurement and data company. The figure of Kantar does not include all digital expenses.

The company is facing headwinds as smartphone sales have declined in recent quarters, including a 4.9% drop in the last three months of last year, according to International Data Corp. For the quarter ended December 31, l & Samsung's operating profit for its mobile division decreased by almost a third, while the semiconductor operating profit fell 29%.

Timothy W. Martin contributed to this article.

Write to Alexandra Bruell on alexandra.bruell@wsj.com and Suzanne Vranica on suzanne.vranica@wsj.com

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