Samsung Electronics has been reducing its number of executives in recent months by a significant margin, an online filing with South Korea’s Financial Supervisory Service revealed, as reported by Business Korea. The documentation filed on Wednesday indicates that the Seoul-based tech giant employed 998 executives by the end of 2016, which marks the first time the company’s number of executives dropped below 1,000 in the last five years. The so-called “era of 1,000 executives” reached its peak in 2014 when the firm employed 1,226 executives, but that number has been diminishing ever since and is expected to be reduced even further by the end of 2017.
The now-continuing decline in the number of Samsung’s executives was likely caused by several factors, including the company’s disbanding of its Future Strategy Office following a major political scandal in South Korea that ended with Samsung Group’s Vice Chairman Jay Y. Lee being arrested. Lee was accused of paying approximately $37 million in bribes to certain independent organizations to facilitate a 2015 merger of two Samsung affiliates in an effort to seize more power within the company and solidifying his title of the conglomerate’s heir apparent, a move that was allegedly made possible by the Future Strategy Office. Some of the office’s executives have now been charged alongside Lee while the unit itself was recently closed down.
Another factor that likely contributed to the declining number of executives at Samsung is last year’s Galaxy Note 7 fiasco. Following the discontinuation of Samsung’s 2016 phablet that shed some doubt on the company’s ability to deliver safe products, the Seoul-based consumer electronics manufacturer made some structural changes in the process of revamping its quality assurance practices, consequently laying off some of its executives. Industry watchers expect Samsung will continue reducing its executive numbers in the following months as the company is still in the process of streamlining its operations and focusing on its core businesses. That trend may be amplified if Lee receives a longer prison sentence later this year due to the aforementioned corruption scandal, though that scenario doesn’t seem likely. An update on the company’s corporate efforts is expected to follow in the coming months.