Samsung is relocating the team that dreamed up the successful "Next Big Thing" marketing campaign to New York and New Jersey, closer to its US headquarters, as part of an effort to consolidate its operations, CNET News has learned.
The move will include Samsung Telecommunications America's marketing group, business-to-business operations, and some other teams, which are currently based in Richardson, Texas, according to people familiar with the plans. Most executives will be moved to a new facility in New York's Meatpacking District, while others will be housed in Samsung's North American headquarters in Ridgefield Park, NJ.
The group's move to New York is already having an effect on turnover, with some employees on their way out or already gone, CNET News has learned.
A big reason for the cross-country move from the Dallas suburb is to relocate mobile marketing executives closer to customers and talent on the East Coast. But Samsung likely also wants to find a way to help STA work more closely with Samsung Electronics America, the TV, PC, and appliances business based in New Jersey. The company will house and potentially merge some of its STA and SEA marketing teams together.
Samsung's different operations traditionally have been isolated from each other, with electronics rarely interacting with mobile. It makes sense for Samsung to locate its businesses closer together physically -- as Apple, Google, and other companies have done for years -- as it tries to build an ecosystem and release software and services that bridge its various gadgets.
Samsung declined to say how many people would be impacted by the relocation plans or to provide further information about the move. Rather, the company in a statement talked up its recent expansion in North America.
"Samsung has seen dramatic growth here in the US as American consumers embrace our products and businesses see the advantages of adopting our enterprise solutions. Samsung has recently reinvested in its Dallas, Texas, facility and is nearing completion on a state-of-the-art research facility in Mountain View, Calif., and a regional headquarters office for its components business in San Jose, Calif. We recently announced our flagship Manhattan office, where we will house a Marketing Center of Excellence that will lead the company's digital, creative, and social media programs, and the Enterprise Customer Briefing Center, which will focus on serving New York commercial and institutional customers. This will allow us to fully leverage the strengths of our people across market segments and better serve our customers."
As mentioned in the statement, Samsung earlier this week said it had signed a lease on a New York building to serve as a "Marketing Center of Excellence" and "Enterprise Briefing Center." The company said the 55,000 square foot property, which is under construction at 837 Washington St. in Manhattan, will open later this year. Many STA employees will relocate to that building.
STA, largely a mobile device sales and marketing organization, is the brains behind Samsung's popular "Next Big Thing" campaign that began with the Galaxy S3 and mocked Apple's devices and fanboys. The marketing created buzz around Samsung's gadgets and helped it dominate the US and global smartphone markets, as STA marketing chief Todd Pendleton, who's currently based in Texas, testified during the patent-infringement trial against Apple in April.
Most STA employees found out about the move earlier this year, shortly after February's Galaxy S5 launch, people familiar with the matter told CNET News. Executives have not yet made the move to the New York area, and many are still deliberating relocation, the people said. While the mobile marketing arm will be transferred, some other Samsung employees will remain in the Dallas area. Samsung also may eventually relocate other operations to its base in Texas.
The STA relocation also comes at a time when Samsung has been expanding its presence in the US. The company has been on a hiring spree in Silicon Valley and other regions -- luring away executives from companies such as Apple -- as it dominates the smartphone market and grows quickly in tablets. Samsung sells more phones than any other company in the world. But it also revealed earlier this month that smartphone and tablet sales have been weak in places like China and warned its operating profit will drop for the third straight time in the second quarter.
Market watchers believe demand for the Galaxy S5 hasn't been as strong as anticipated, and there are also worries Samsung's sales could take a hit when Apple releases a new iPhone later this year with a bigger screen -- one of the main selling points for Samsung's devices.
Samsung also has recently lost a number of senior executives in its US operations, CNET News has learned. Executive turnover isn't surprising at an organization Samsung's size (it employs nearly 300,000 people around the globe), but the company has been hit by several high-ranking departures over the past year in the US. Many have come from STA -- with some likely a response to the impending move -- but others have come from the electronics arm.
One recent exit is Mike Abary, senior vice president of Samsung Electronics America, who left to pursue another opportunity. Abary, who oversaw Samsung's tablet, PC, and wearables operations from SEA's offices in New Jersey, has presented at the Consumer Electronics Show as the face of Samsung's tablet and PC efforts. He also appeared onstage at Samsung's Galaxy Tab S launch last month in New York.
Samsung acknowledged Abary's departure and said that effective immediately, Alanna Cotton, Samsung's new vice president of mobile computing marketing, will lead the tablet, wearables, and PC teams on an interim basis. Cotton, who joined the company from PepsiCo about a month ago, has brought "a strong background in building brands, channel management, and team leadership," Samsung said, and will "provide new perspectives and initiatives" as the company continues growing its businesses.
Also leaving Samsung is Casey Ryan, vice president of product and operations in mobile computing at STA, CNET has learned. Ryan, who was based in Texas, was another top executive in Samsung's tablet operations.
Mark Ramsey, the Texas-based senior vice president and chief data officer at STA, also will depart. His role, while not a public-facing one like that of some product managers, is important to a company that relies heavily on data to make decisions about future products. Ramsey oversaw consumer and supply chain data research to develop new technology and business opportunities.
In other moves, Petey McKnight, the former vice president of channel and launch marketing at STA in Texas, recently left Samsung. She worked with US carriers and helped plan for the launch of new products. And Laurie Ryan, an Atlanta-based director of marketing for STA, also has departed. She was responsible for developing and executing Samsung's strategy with AT&T. Parisa Zander, general manager and senior director of retail design at STA, left the company in March to return to her former employer, Microsoft.
Other departures from STA earlier this year, which CNET News first reported in April, included Seshu Madhavapeddy, the senior vice president of product and technology who was responsible for development and delivery of Samsung's mobile devices; Nanda Ramachandran, the vice president and general manager who led strategy, marketing, and product management for Galaxy tablets, the Galaxy Gear smartwatch, and Samsung HomeSync; Mike Pennington, vice president of sales operations and head of national sales; Ketrina Dunagan, the vice president of retail and channel marketing who helped roll out the Samsung Experience Shops in Best Buy; and Donna Cerny, director of human resources.
Many executives who recently left now work for Samsung's rivals and partners. Ramachandran serves as head of strategy and operations for global hardware sales at Google. Dunagan works as vice president of marketing for the Americas at Motorola Mobility, the handset vendor that Chinese PC maker Lenovo is buying from Google for $2.91 billion. And Cerny works in HR at Apple.