Kwon Bong-seok, LG Electronics CEO, to Employees: "Regretful Heart... A Decision for a New Leap"

Consolation for Employees of the MC Business Division

[Image source=Yonhap News]

[Asia Economy Reporter Cha Min-young] Kwon Bong-seok, CEO of LG Electronics, sent a direct email to employees of the mobile phone division to console them after deciding to withdraw from the mobile phone business.

According to industry sources on the 7th, CEO Kwon sent an internal email in his name to the employees of the MC Business Division on the 5th of this month, when the decision to withdraw from LG Electronics' mobile business was made, stating, "After long deliberation, the management, including myself, has made the very difficult final decision to terminate the MC business."

CEO Kwon said, "As I think about what this decision means to the members of the MC Business Division, I feel very sorry and heavy-hearted as the CEO," adding, "However, I would appreciate it if you understand that this was a resolution to prepare for a new leap forward together with you."

He continued, "We will proceed with reassignment by considering each individual's mobility preferences as much as possible in securing business capabilities to enhance the future value of LG Electronics and the group," emphasizing, "We expect the members of the MC Business Division to fully demonstrate their capabilities in strengthening the competitiveness of LG Electronics and LG Group's core and growth businesses."

CEO Kwon Bong-seok, who took office last year, has held various positions in LG Electronics' MC Business Division, including Head of Product Planning Group in 2012 and Head of the MC Business Division in 2019. Earlier this year in January, CEO Kwon also sent an email to MC Business Division employees to reassure them by saying, "Regardless of how the business operation direction is decided, employment will be maintained in principle, so there is no need to worry."

LG Electronics held a board meeting on the 5th of this month and decided to withdraw from the mobile business handled by the MC Business Division as of July 31 this year, citing intensified business competition and continuous business downturn. LG Electronics' MC Business Division recorded losses for 23 consecutive quarters from the second quarter of 2015 to the fourth quarter of last year, accumulating a deficit of 5 trillion won. It is reported that Lee Yeon-mo, Vice President and Head of LG Electronics MC Business Division, also expressed his apologies directly during an internal briefing for employees after the board resolution, explaining the background of the business termination and the future reassignment schedule.

LG Electronics promises to maintain employment for about 3,400 personnel within the MC Business Division and plans to proceed with workforce reassignment. Starting with a call for employees to transfer to LG Energy Solution, the reassignment to affiliates and business divisions is scheduled to be completed by the end of June.

High demand is expected from affiliates such as the home appliance factory and research institute in Changwon, Gyeongnam, the automotive parts (VS) business division, the joint venture with Magna, LG Energy Solution, and LG Display. LG Electronics plans to continue research and development of core mobile technologies, so some personnel may be reassigned to secure foundational 6G technologies.

LG Electronics stated, "Core mobile technologies such as 6G mobile communication, cameras, and software are capabilities needed for next-generation TVs, home appliances, automotive components, and robots, so research and development will continue mainly in the CTO division," adding, "Through this, we will prepare for the era of the Internet of Everything intelligence, where autonomous driving as well as people, objects, and spaces are closely and organically connected."