LG Display will implement a voluntary retirement program to downsize its workforce following the replacement of its CEO. The company has shifted into emergency mode due to deteriorating earnings and begun to implement a comprehensive restructuring plan.
LG Display plans to hold a series of business environment briefing sessions for employees from Sept. 17 and receive applications for voluntary retirement for three weeks from Sept. 23.
Those eligible for the program are production line workers with more than five years of service and will be paid their salaries for three years in retirement benefits. LG Display plans to complete the voluntary retirement program by the end of October.
The company plans to consider expanding the voluntary retirement program to office workers, in particular, those in the LCD business sector in light of the company’s accelerating shift to the OLED business. In addition, the company plans to trim its workforce by reducing the number of executives and units under them in order to increase the speed of management and strengthen the responsibility-based management system.
On the previous day, LG Display accepted president Han Sang-beom’s resignation and appointed Chung Ho-young as president in an emergency meeting of the board of directors. Chung will be appointed as CEO if he is approved by general shareholders and the board of directors next March.
Earlier, LG Display entered an intensive emergency management system due to the deterioration of its business environment and poor earnings which stemmed from falling prices due to LCD oversupply from China and intensifying global competition.
In particular, LG Display is facing an urgent need to revamp itself through innovation to a shift of its business structure to OLEDs from LCDs suffering a big drop in profitability. In this process, the company is moving surplus labor from the closure of old-generation panel production plants that are less competitive to new business sectors such as the OLED business, but the management judge that there is a limit to accepting all surplus labor.
“The management and the labor union have decided to conduct the voluntary retirement program through in-depth discussions,” an LG Display official said. “We inevitably implement the voluntary retirement program, but we will continue recruiting R&D personnel and talented people in order to secure competitiveness in future technologies such as OLEDs.”