South Korea's LG Electronics cut 30 percent of its overseas mobile phone division staff, according to a South Korean media report, underscoring the company's attempt to reform its business and boost smartphone sales.
The report, in the Korea Economic Daily, did not cite its sources, but said that the cuts mainly involved mobile marketing and purchasing jobs as well as the shuttering of some unprofitable outlets. The report added that LG is expected to make similar moves in its domestic business.
LG spokesman Ken Hong declined to comment on the report, calling it speculation. "That said, we continue to evaluate all options to get LG back on track, sooner than later," he told FierceWireless. "And turning around our mobile operations is a top priority."
LG's mobile phone business has been generating operating losses for the past five quarters. LG shipped 24.8 million total handsets in the second quarter, up from 24.5 million in the first quarter but down from 30.6 million units in the year-ago quarter. In July LG said it expects to sell 24 million smartphones this year, down from a previous target of 30 million units; the company expects to sell 114 million handset units overall, well below its previous target of 150 million units.
Despite the lackluster unit volumes, LG said during its second-quarter earnings announcement that it is confident in its transition. The company said it is seeing growth in sales of its Optimus One and Optimus 2X devices in North America. LG said it expects increased handset sales for the third quarter due to new products and more smartphones. LG CFO David Jung said at the time that the company will continue to reduce its feature phone production as it shifts its focus to high-end smartphones even if that leads to a decline in overall unit shipments.
- see this Korea Economic Daily article (translated via Google Translate)
- see this Reuters article
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