LG Electronics Implements Voluntary Retirement... One-Third of TV Division Executives Cut in Q2

LG Electronics Implements Company-Wide Voluntary Retirement
Streamlining the Organization
Samsung Electronics Launches First Management Review of VD Division in a Decade
Considers Organizational Restructuring
Chinese Firms Closing the Gap, Glo

LG Electronics has initiated a company-wide voluntary retirement program as part of its efforts to enhance workforce efficiency. Samsung Electronics has also begun a management review of its key business divisions, signaling a wave of restructuring across the domestic electronics industry. Both companies have no other choice but to pursue organizational reforms simultaneously, as they face a combination of low-cost competition from China, global tariff wars, and an economic slowdown.

According to industry sources on September 18, LG Electronics is conducting a voluntary retirement program for employees aged 50 and above or those with poor performance across all business divisions, including Home Appliance & Air Solution (HS), TV (MS), Vehicle Component Solutions (VS), and Heating, Ventilation & Air Conditioning (ES). In addition to statutory severance pay, the company will provide up to three years’ worth of annual salary and two years’ worth of educational support for employees’ children. This is the first company-wide voluntary retirement at LG Electronics in two years, since 2023. The MS division reduced its number of executives from 31 in the first quarter to 20 in the second quarter, streamlining its organization since the first half of the year.

Earlier this month, Samsung Electronics began a comprehensive management review of its Visual Display (VD) division, examining all management and development processes. This is the first such review in 10 years, since 2015, and the company plans to decide on potential organizational restructuring by the end of the year. Samsung has already entered an emergency management mode, reassigning some employees to other divisions and restricting new hires. Internally, some point out that what is needed is not just workforce adjustment but also improvements to the decision-making structure.

The reason both companies are taking such drastic measures is deteriorating performance. The securities industry forecasts LG Electronics’ operating profit this year to be 2.6834 trillion won, a 21% decrease compared to last year. Samsung Electronics’ VD division posted an operating profit of about 100 billion won in the second quarter, only one-third of the estimated figure for the same period last year.

The rapid rise of Chinese companies is heightening the sense of crisis. According to TrendForce, in the first half of this year, the combined market share of the three leading Chinese companies among the top five in the global TV market reached 35.9%, surpassing the combined share of Samsung and LG at 29.7%. Chinese companies are not only engaging in aggressive price competition but are also rapidly catching up in terms of technology. High tariffs imposed by the United States are also a burden. The Trump administration imposed 50% tariffs on steel and aluminum, and the same level of tariffs applies to steel used in home appliances such as refrigerators, washing machines, and dryers. With Mexico also announcing tariffs of up to 50% on steel and home appliances, export uncertainties have increased further.

This trend is also affecting the display industry. LG Display recorded an operating loss of 116 billion won in the second quarter, with TV panels accounting for 20% of its sales. The losses in LG Electronics’ TV business have directly impacted the panel business. Both Samsung Display and LG Display are seeking breakthroughs with IT device and automotive panels, but many point out that unless they reduce their reliance on traditional TV and home appliances, structural difficulties may continue to recur.

Industry experts warn that the Korean electronics industry’s strategy could follow the same path as Japan’s Sony in the past. A representative from the set industry commented, “Sony exited the business after losing the LCD TV market to China and relying solely on a premium strategy. If Samsung and LG do not accelerate their organizational transformation, it will be difficult to avoid a similar decline.”