LG is reportedly considering an exit from the competitive smartphone market. The company may be “considering all possible measures, including sale, withdrawal and downsizing of the smartphone business,” an LG official said, as per a report. A fresh report suggests that LG is considering moving 60 percent of its staff to other business units within the company or to other LG affiliates. The future of the rest 40 percent of the staff is still a mystery, but the report cites the company official who said that “regardless of any change in the direction of the smartphone business operation, the employment will be maintained.”
The Korea Herald reports that LG CEO Kwon Bong-seok has sent out an email to its employees explaining the intention to shut down its smartphone business. The company has reportedly lost about $4.5 billion (roughly Rs. 32856 crores) over the past five years, and an official claims that it was time for LG to make a move. “Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice. The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business,” an LG official told the publication.
LG competes with home rival Samsung in the smartphone business, along with several other budget smartphone makers from China like Xiaomi, Oppo, Vivo, and OnePlus. The CEO reportedly assured his employees that no one would be fired, although the report suggests that 60 percent of the staff will be absorbed elsewhere. The remaining 40 percent could continue to remain in the smartphone arm if the company looks to downsize and focus on just flagship models. Last year, LG introduced the dual-screen Velvet and flip LG Wing handsets with the aim to stand out and offer a unique experience.
This report comes soon after CES 2021, where LG showcased its unique rollable display smartphone. It comes with a resizable screen and is part of the company’s Explorer Project. In any event, LG’s mobile communications business has reported an operating loss for 22 consecutive quarters.