Reports say, LG CEO Kwon Bong-Seok has informed all the employees via email about its intentions of shutting down the smartphone segment owing to huge losses
LG is reportedly planning to quit the smartphone market. The electronics giant is said to be considering all means from a potential sale to downsizing to taking back its footprint from the competitive smartphone segment. LG is also said to be relocating 60 per cent of its staff in the smartphone segment to other business units within the company affiliates. Nothing has been decided for the remaining 40 per cent of the employees but regardless of all the changes, LG has made clear that their employment with the company will be retained.
A report by Korea Herald said that LG CEO Kwon Bong-Seok has informed all the employees via email about its intentions of shutting down the smartphone segment owing to huge losses. The company incurred losses mounting about $4.5 billion (roughly Rs. 32856 crores) in the last five years in the smartphone market making LG take a ‘cold judgement’ said an official.
LG faces fierce competition in its home from Samsung, also a Korean electronics brand in the smartphone business along with several newcomers from China be it Xiaomi, OnePlus, Oppo or Vivo. As 60 per cent of the job holders that have been moved to other segments, the remaining 40 per cent can be retained if the company wants to not completely exit but focus on a few flagship models only. Last year, LG launched two new handsets, the dual-screen Velvet and flip LG Wing handsets with the aim to stand out from the rest in the market.
Incidentally, the reports of LG downsizing comes after CES 2021 the company had unveiled its unique rollable display smartphone. Part of the company’s Explorer project, the phone has a unique feature of a resizable screen. In the event, LG’s mobile communications business reported an operating loss for 22 consecutive quarters.