Could LG Electronics Be Cutting Jobs?

By Ed Silverstein September 16, 2011

There are conflicting news reports whether LG Electronics is reducing its workforce – and by how much – in a possible effort to turn around the company.

LG had some 10,000 mobile employees working in South Korea as of the end of June, Reuters said. But one source, the Maeil Business Newspaper, reported that LG was going to “realign” some 1,000 jobs, which represents between 10 and 15 percent of its “domestic” mobile staff. These are mainly marketing employees, Reuters said.

LG has experienced five straight quarterly losses, Reuters said. The news agency said the company’s troubles can be largely attributed to mobile phone sales and competition.

Koo Bon-joon, a member of LG's founding family, became the company’s CEO a year ago. It appears he is focusing on “high-margin smartphones, bolstering research staff in an attempt to catch up to rivals,” Reuters said.

Earlier this month, Reuters reported that LG Electronics may have cut some 30 percent of “overseas staff” at the mobile phone unit – basing it on media stories. In addition, the company was to close “some unprofitable outlets,” the Korea Economic Daily reported, according to Reuters. But Reuters later reported that LG said “the report was groundless.”

"We are always looking at opportunities to improve the performance of our mobile business but no decision has been made as to any job reductions," according to statement from LG made back then, Reuters said.

In a related story, TechZone360 reported earlier this year that LG Electronics saw its second-quarter net profits drop as the company’s sales also declined, according to media reports.

 The Associated Press reported that LG saw 108.4 billion won ($103.3 million) in the quarter which ended on June 30. That is an 87.3 percent decrease from the amount of net profit the company saw in the same time period in 2010, The AP said.

LG is ranked third in mobile phones, after Nokia and Samsung. In addition, LG is number 2 in flat screen TVs behind Samsung.

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves

TechZone360 Contributor

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