Earlier today, the WSJ reported that Samsung is looking at an internal reorganization of its management because of its poor performance. The same report also suggests that Samsung sold 40% lesser units of the Galaxy S5 than expected.  

To make matters worse, the company product about 20% more units of the devices based on the survey data provided by the carriers. This led to millions of units of the Galaxy S5 piling up in Samsung’s warehouse, which led the company to increase its marketing budget to bolster the sales of the device.

Within the first three months of its launch, Samsung managed to ship 12 million units of the Galaxy S5. This is considerably lower than the 16 million units of the Galaxy S4 that it managed to ship in the same period last year. The only market where the Galaxy S5 managed to outsell its predecessor was the United States.

“The company is not coping with the performance of the business very well,” the person said. “Morale is beaten down.”

In China — one of the fastest growing and key markets for Samsung and Apple — the Galaxy S5 performed poorly and sold nearly 50% less units within the first six months of its launch compared to the Galaxy S4. With Samsung facing heavy competition from Chinese OEMs in the Asian markets, the company needs to tighten up its product portfolio, and come up with a truly innovative devices to remain the number one smartphone maker in the world.