As the sluggish global economy crushes company after company, South Korea's Samsung Electronics has been the latest hit, as the company announced it will split current operations into two separate divisions.
One division will handle consumer products -- with products ranging from TVs to mobile phones -- while the components division will handle RAM and LCD monitors, Samsung said in a statement. Current CEO Lee Yoon-woo will take care of the components division. The consumer products division will be controlled by Choi Gee-sung, Samsung's president of mobile phone operations.
Samsung faced a problem as the company operates a consumer products division while supplying components directly to companies that compete with Samsung.
Financial analysts expect Samsung to report its first loss since the company started to publicly release financial numbers in 2000.
Some Samsung executives will face salary cuts up to 20 percent while other employees will have their benefits altered in the immediate future, Samsung said. A growing number of tech companies have been forced to layoff workers and reduce employee pay, with the option to reorganize simply not viable.
This is the first Samsung reorganization since the South Korean electronics giant faced a tax evasion scandal that took place in 2008. Former CEO Lee Kun Hee received a suspended three-year sentence in the controversy, with another executive resigning last May.
