Exploding Phones Spark Performance-Review Fears at Samsung

October 31, 2016

[mehmet cetin/shutterstock]
[mehmet cetin/shutterstock]

Samsung executives are anxiously awaiting their annual performance reviews amid reports of the company’s flagship Galaxy Note7 smartphone smoking and bursting into flames. As Reuters reported on Oct. 19, the South Korean electronics firm discontinued sales of the nearly $900 device in October, and forecasts a $5.4 billion hit to its operating profits.

“Everyone’s afraid to be heard even breathing,” said one Samsung employee, quoted anonymously. “There will be punitive measures; someone will have to take responsibility for this.”  The company’s annual personnel decisions are closely guarded secrets, with executives learning of changes at the last minute. “There’s a lot of talk there could be major turnover in the executive ranks on the hardware side,” said an insider, and “concern among the working-level employees about a major restructuring.”

Samsung told Reuters that it was not considering any management changes or restructuring in response to the Note7 crisis.

The company has not determined what’s causing smoke or fires in the replacement phones that it began shipping in September, with what it said were safe batteries.

Some insiders reportedly criticized Samsung’s mobile business for changing product specifications without delaying launches, and for pressuring staff and suppliers to deliver fast to overcome slowing growth amid strong competition from rivals, including Apple and Huawei Technologies. And several employees said they felt ashamed that customers ditched the Note7 for rival products, or when they heard reports about the phones being banned from airplanes.

Greg Beaubien

Greg Beaubien is a frequent contributor to PRSA’s publications.


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