On the same day that the company forecast record quarterly profits, Samsung’s chief executive officer and vice chairman, Oh-Hyun Kwon, has announced his resignation. He called for a change in leadership as the Korean firm faces an “unprecedented crisis inside out.”
"It is something I had been thinking long and hard about for quite some time. It has not been an easy decision, but I feel I can no longer put it off," Kwon said in a letter to employees. "As we are confronted with unprecedented crisis inside out, I believe that time has now come for the company start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry."
A few hours before Kwon dropped the bombshell, Samsung Electronics said it expected profits for the last quarter to be at an all-time high, mostly thanks to the increase in memory chip prices. The company has forecast a profit of 14.5 trillion won (around $12.81 billion), beating market expectations with a 179 percent YoY increase. Sales of the Note 8, which received more pre-orders than any other phone in the Note line, also helped boost the numbers.
The “crisis” Kwon is referring to is the arrest and imprisonment of Lee Jae-yong, Samsung Electronics group’s heir-apparent. Lee was sentenced to five years in prison on bribery and corruption charges in August, following accusations he was involved in a massive scandal that led to the ousting of former South Korean President Park Geun Hye.
Kwon, who joined the firm in 1985 and has been Samsung Electronics' CEO since 2012, will remain on the company’s board until March 2018. A Samsung spokesperson said a successor would be appointed “soon,” but gave no specifics.