LG Display plans to cut jobs amid financial losses, appoints new CEO
LG Display Co Ltd has announced a voluntary redundancy program for its domestic production line employees as financial losses climb. It is not sure as to how many out of about 23,000 South Korean production line workers would get affected.
The announcement of the job cuts comes soon after, CEO Han Sang-beom stepped down subsequent to an emergency board meeting. Now, the South Korean electronics brand has appointed Jeong Ho-young as the new head.
Reportedly, former CEO and Vice Chairman Han Sang-beom had expressed his desire to resign in order to take responsibility for the recent decline in the company's profits.
LG Display has been one of the world's largest manufacturer and supplier of thin-film transistor liquid crystal display (TFT-LCD) panels, OLEDs and flexible displays. But recently it has been struggling with losses in the face of heavy Chinese competition and slowed global demand. On one side, it has been hit hard by the supply glut in the liquid crystal display (LCD) TV panel market due to fast expansion by Chinese competitors, on the other, the prolonged trade disputes between the world’s two superpowers the United States and China have slowed panel demand worldwide.
The Seoul headquartered company logged an operating loss of $312.6 Mn for the second quarter ended June this year. Now as it switches to its emergency plan to address falling earnings and lower panel price because of an oversupply of Chinese panels, it invites applicants for early retirement program as well. The move is said to be timed with the company’s phase out from LCD business. LG Display has 59,000 employees globally, including in China. But the company plans to take voluntary redundancy applications from Korean workers who had been at the company five years or more over the next few weeks.
As the United States and China trade war continues and the competition becomes more fierce, LG Display has a lot of battles to fight both internally and externally. How far does these job cuts help in making up for the losses is uncertain, but a new leader might bring in more hope for the firm. While Jeong will formally assume the role of the CEO after the shareholders meeting in March next year, he has time to assess and understand how he will help LG Display tackle the various issues. From turning around the loss making business to dealing with Japan’s restriction against Korea on fluorine polyimide exports, which is used in smartphone displays, he has a lot of challenges to conquer.
Image Credits: NDTV