[Exclusive] LG Energy Solution's Early This Month Personnel Restructuring... Signal for Organizational Efficiency?

Organizational Restructuring Around the Time of President Kim Dongmyeong's Message
Streamlining the Organization by Integrating Overlapping Functions

LG Energy Solution Ochang Energy Plant panorama. Photo by LG Energy Solution

LG Energy Solution has confirmed that it has carried out an organizational restructuring, including integrating some parts of the HR division and establishing a global human resources (HR) management organization.

According to industry sources on the 9th, LG Energy Solution integrated some teams in the HR division earlier this month, such as merging the Competency Development Team and the Technical Competency Development Team under the Chief Human Resources Officer (CHO) into the Job Competency Development Team, and newly established a global HR position.

This organizational restructuring strongly aims to eliminate overlapping functions in HR tasks such as planning development programs. The global HR was newly created to manage overseas employees, who account for 65% of the total workforce. As of the end of last year, LG Energy Solution had a total of 35,764 employees, with 12,166 (34.0%) domestic and 23,598 (65.9%) overseas employees.

Regarding LG Energy Solution's HR organizational restructuring, the industry interprets it as a consideration of organizational efficiency amid the electric vehicle chasm (temporary demand stagnation) and deteriorating performance. A business insider said, "The department that plans and executes slimming down or restructuring the organization is HR," adding, "It is common for HR to take the lead in organizing the company internally or creating a corporate atmosphere." It is pointed out that HR slimming could be the 'starting signal' for LG Energy Solution's organizational efficiency.

In particular, this partial organizational restructuring coincides with the timing of a message from Kim Dong-myung, President of LG Energy Solution. Earlier this month, President Kim told employees, "It is true that aggressive order acquisition and business expansion so far have caused many inefficiencies in areas such as manpower, facilities, and procurement," and "I ask you to deeply consider ways to increase investment flexibility and efficiency by organization."

Professor Lee Ho-geun of Daeduk University’s Department of Automotive Engineering evaluated, "The battery industry is currently going through a period where it must prepare for demand slowdown," and "LG Energy Solution’s move to integrate overlapping organizations and restructure is a self-help measure to reduce fixed costs and tighten the belt."

The company stated regarding the organizational restructuring, "It is a regular HR adjustment focused on integrating and managing overlapping team functions," and "There was no reduction in functions or personnel."