Employees of MC Division to Be Transferred to Other Work Sites
LG Electronics has reportedly decided to stop its efforts to sell off its MC Business Division and completely withdraw from the smartphone industry by shutting down its plants.
The company has started preparations to transfer employees of the MC Divison to other work sites.
The withdrawal decision came two months after the company’s announcement in January that it will start a review to determine the fate of its slumping mobile phone business.
Although LG Electronics tried to sell off its assets, it failed to iron out differences over patents with possible buyers and decided to completely pull out of the smartphone business. The company is expected to make an official announcement on the matter on April 5 when a board meeting is held.
LG Electronics is planning to transfer employees of the MC Division to its automotive electronics and battery businesses, which are promoted as future growth drivers.
Meanwhile, the MC Business Division has been in operating loss for 23 consecutive quarters since the second quarter of 2015 until the fourth quarter of 2020. By the end of 2020, its cumulative operating loss ballooned to 5 trillion won. Its loss fell from one trillion won in 2019 to 800 billion won in 2020. Yet LG Electronics has decided to quit the mobile phone business as sales of smartphones have been on the decline.