Samsung fires marketing staff following internal audit - sources

Reuters

The logo of Samsung Electronics is seen at its office building in Seoul

• Samsung Electronics America has fired staff following an internal audit over gifting practices, according to two people familiar with the situation.
• Two people said the cuts represented most of the US marketing staff, although another person put the number at closer to 20.
• The company's chief marketing officer and head of media and planning were among the top execs who have left.

Samsung Electronics America, one of the world's biggest marketers, has fired most of its US marketing staff following an audit over gifting practices, according to two people familiar with the situation.

It's unclear exactly how many people were impacted. One source was told 40 people were let go. Two others said the number let go represented upwards of 80% of the marketing team. Another source close to the situation said the number was closer to 15 to 25 of a marketing team of about 200 people, though.

Samsung provided a statement that read: "Recently, organization changes have been made to our marketing division. We have a strong management team in the U.S. who remains focused on continuing to provide our customers in North America with the products and experiences they have come to expect of the Samsung brand."

Samsung's audit looked at dealings between its marketing staff and business partners such as media companies and its ad agencies including Interpublic Group of Cos's PMK-BNC and R/GA, PR agency Edelman and Publicis Groupe SA's media agency, The Wall Street Journal reported today. The company routinely audits these processes.

The changes coincide with Samsung Electronics America's chief marketing officer, Marc Mathieu, leaving after nearly four years, it was reported March 13. At the time, the company didn't give any details about the reason for his leaving or his replacement.

Another higher-up who left was Jay Altschuler, who was head of media and planning and who was hired away from Unilever in 2015. It's unclear if their departures are directly related to the marketing staff cuts.

Mathieu and Altschuler have not responded to emails requesting comment. Neither has been replaced. There was no word on their replacements. The company doesn't comment on specific personnel.

Samsung spent $583 million on paid media in 2018, according to Kantar Media.

Media buying practices have come under scrutiny after the Association of National Advertisers in 2016 came out with a bombshell report detailing kickbacks and other non-transparent practices in the advertising industry. Agencies were accused of taking kickbacks from media vendors and not disclosing them to clients but keeping the money to pad their profits.

Since then, marketers have ratcheted up their attention to transparency into all areas of media buying and selling. Gift giving and entertainment has long been a part of the way business is done, but marketers have been tightening up on accepting gifts from media vendors who use them to win new or continuing business.

The limit can vary widely, though, so gift-giving and entertaining policies are still all over the map. For some marketers, the limit is as little as $25, but at one vendor, the cap was $500, for example.

Following the report, an ANA survey found 60% of agencies reported having taken steps to be more transparent but 25% of ANA's marketing members were unsure if their agency was working on the transparency issue.

Tanya Dua contributed to this story.