LG is looking at winding up its smartphone business. It is seriously considering shifting 60 per cent of its workforce to other arms within the Company. However, there is no clarity as to what will happen to the remaining 40 per cent of the staff, even while employees have been assured that they will not be fired.
Employees have been officially informed of the Company’s plans to quit the smartphone market for good, as it has apparently incurred losses to the tune of $4.5 billion in the past few years. It had incurred operating losses for over 20 quarters consecutively, ever since 2015. All attempts to turnaround the fortune of the Company seem to have failed. It had even launched new models and resorted to outsourcing the production of its budget models to original design manufacturers, but nothing had really worked. However, the other divisions of the Company have been doing very well.
This decision has been projected as the best for the Company, considering the tough competition in the mobile devices market. It will either downsize the mobile devices division or go in for a sale, or withdraw its premium smartphone models alone. Nothing has been finalised or decided yet.
Some media reports reveal that a Vietnamese company, VinGroup, is bidding to acquire LG’s smartphone arm, so that it can enter the American market. However, nothing is known for sure about LG’s intentions.