LG intends to shut down production of smartphones due to losses. The Korea Herald, which received a copy of an internal letter from the company’s head Kwon Bong-Seok, reports this.
According to the journalists, the CEO of LG Electronics sent out a message to employees on Wednesday, Jan. 20, warning that the corporation intends to withdraw from the smartphone market. “Since the competition in the market is too intense, it is time for LG to make a sober decision and make a better choice,” Kwon Bong-Sok said.
The corporate executive explained that three options are being considered – reducing the pace of smartphone development and production, selling the mobile business or closing it permanently. The entrepreneur said that employees should not worry about the possible closure of the company, because all the specialists will keep their jobs, regardless of the outcome.
Experts estimate that LG’s mobile division has made a loss of about 5 billion won, or about $4.5 billion, over the past five years. Sources said 60 percent of the staff would be transferred to other departments of the company and firms LG works with if it closes.
Journalists noted that the statement about the possible closure of the mobile business looks strange against the background of the company’s active work on new smartphones. In particular, at last year’s CES 2021 LG introduced a concept of a device with a retractable screen. This device was created as part of the Explorer Project research area, just like the Wing, which has two screens.