In a letter to his employees, the LG boss announced that a sale was likely on the table. 60 percent of the mobile section will be shifted to other departments of the company.
Describing the claims that they will withdraw from the mobile market as unfounded, LG’s management changed their mouth. The firm is on the eve of a difficult decision.
LG will make a tough decision
It was previously on the agenda that LG talked about its decision to exit the mobile market within the company. LG boss Kwon Bong-seok wrote to his employees that they were on the eve of a very difficult decision. The plans include a complete withdrawal from the market due to tough competition conditions, a downsizing of sales or division. 60 percent of the mobile department employees will be shifted to other parts of the company. The remaining 40 percent will continue in the transferred company or execute the shrinking section.
The LG mobile division has been in steady losses for the last 6 years and has caused a total loss of $ 5 billion. Since LG’s overall operating profit was positive, the loss of the mobile division was somewhat melt away, but that could go so far.
Although many interesting smartphone models have appeared on the market in recent years, LG has never been able to go back to the G2 or G3 periods. Intensive moves by Chinese manufacturers during this period have pulled LG’s market share up to 1.7 percent. The firm had planned to produce intermediate entry-level phones over third-party ODM, but that didn’t come as a savior.