LG Electronics denies downsizing mobile division

[THE INVESTOR] LG Electronics on June 16 dismissed a news report that the Korean tech giant is preparing to reduce about 1,000 employees at its struggling mobile business division.

“We are relocating some employees to other business divisions as disclosed in May, but we are not considering any job cuts,” an LG Electronics spokesperson told The Investor, a brand new online business news site recently launched by The Korea Herald.

“Some hundreds of workers have been relocated on a regular basis,” he added, saying related works are still ongoing and no specifics have been decided yet. 

On the day, News 1, a local news agency, reported that LG’s mobile business division will be downsizing to improve profitability. Except premium lines such as V and G series, some hundreds of budget phone lineups are expected to be drastically reduced, the report said.

In May, LG Electronics CEO and mobile chief Cho Juno unveiled a reshuffle plan in his emailed message to employees. He also made it clear that there would be no restructuring against individual employees’ wills.

“We need to change the way we work to move faster and lighter,” Cho said.

“Other business divisions also need people from MC (mobile communications). We will continue to reshuffle personnel.”

The division has struggled from operating losses since the failure of its flagship smartphone G4 last year. The company relocated 15 to 20 percent of its total workforce.

In its first-quarter earnings report in April, the company said it could see a turnaround in the second quarter when G5 shipment start to be reflected in sales. In the quarter, the company posted an operating loss of 202.2 billion won (US$173 million).

The company forecast it would sell 3 million units of the G5 phone in the second quarter, but industry watchers are skeptical about the sales target.

By Lee Ji-yoon (jylee@heraldcorp.com)