Samsung Electronics America, one of the world’s biggest marketers, has fired a bunch of its US marketing staffers following an audit over gifting practices, according to two people familiar with the situation.
It’s unclear exactly how many people were affected. One source said they were told 40 people were let go. Two others said the number represented upward of 80% of the marketing team. Another source close to the situation said it was closer to 15 to 25 on a marketing team of about 200 people.
Samsung said in a statement: “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 its business partners such as media companies and ad agencies, including Interpublic Group of Companies’ PMK-BNC and R/GA, the public-relations agency Edelman, and Publicis Groupe’s media agency, The Wall Street Journal reported on Thursday. Samsung routinely audits these processes.
PMK-BNC and R/GA did not immediately respond to a request for comment. Publicis declined to comment. Edelman deferred to Samsung.
The Journal reported on March 13 that Samsung Electronics America’s chief marketing officer, Marc Mathieu, would leave after nearly four years. At the time, the company didn’t give any details about the reason for his leaving or his replacement.
In a statement to Business Insider, Mathieu didn’t address the reasons for his leaving but said: “I can confirm that I am moving on to the next chapter in my career. My departure from Samsung is a personal decision and a career choice. Samsung has truly unlocked the power of technology for me and taught me how it can enhance peoples’ daily lives and the greater good of humanity. I have been privileged to lead a talented team of marketers which has led to incredible brand growth during my tenure at the company. My last day with the company will be March 29th.”
Another higher-up who left was Jay Altschuler, the head of media and planning, who was hired away from Unilever in 2015.
It’s unclear whether their departures are directly related to the marketing staff cuts.
Executives outside the company who have worked with Mathieu and Altschuler expressed surprise at the exits.
Mathieu “was always a professional,” one said. “This came out of left field to me. Total surprise.”
Altschuler didn’t respond to emails requesting comment, and the company said it wouldn’t comment on specific personnel. There was no word on their replacements.
There’s been speculation that Samsung will centralize marketing operations at its base in South Korea, but the company is expected to maintain the status quo. Samsung spent $583 million on paid media, which doesn’t include all marketing activity, in 2018, according to Kantar Media.
Media-buying practices have come under scrutiny since the Association of National Advertisers in 2016 came out with a bombshell report detailing kickbacks and other nontransparent 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 in all areas of media buying and selling. Though gift-giving and entertaining have long been a part of the way business is done, marketers have been tightening up on accepting gifts from media vendors who use them to win new or continuing business. Such policies are still all over the map, however — for some marketers the limit is as little as $25, but at one vendor the cap was $500, for example.
Following its report, the ANA said 60% of agencies had reported taking steps to be more transparent, but in a July 2017 survey of ANA’s marketing members, 25% said they were unsure whether their agency was working on transparency.
Tanya Dua contributed to this story.
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