LG Electronics Implements Company-wide Voluntary Retirement Program for Employees Aged 50 and Above, Underperformers

Voluntary Retirement Across All Divisions for the First Time in Two Years Since 2023
Facing Dual Challenges: Aggressive Price Competition from China and Direct Impact of US Tariffs

LG Electronics is implementing a voluntary retirement program for employees aged 50 and above, as well as underperformers, across all business divisions. Previously, the company had limited this program to the Media Entertainment Solution (MS) Business Division, which oversees the TV business, but it is now expanding it to all business divisions. This move is seen as an effort to enhance business competitiveness through workforce optimization amid increasing internal and external uncertainties.

According to industry sources on September 17, LG Electronics will offer a voluntary retirement program across all divisions, providing severance pay equivalent to up to three years of annual salary and educational support for employees' children. The program covers all business divisions, including the Home Appliance & Air Solution (HS) Business Division, Media Entertainment Solution (MS) Business Division (TV), Vehicle component Solutions (VS) Business Division, and Business Solutions (ES) Business Division (B2B).

The eligible employees are those aged 50 or older or those classified as underperformers. However, the voluntary retirement is only available to those who wish to apply. In addition to the statutory severance pay, the company will provide compensation equivalent to up to three years of annual salary, depending on the remaining period until retirement, and up to two years of educational support for children.

Previously, LG Electronics first implemented the voluntary retirement program in the MS Business Division, which is responsible for the TV business, as part of efforts to streamline the organization. The MS Business Division was the only division to record an operating loss (191.7 billion won) in the second quarter. An LG Electronics official explained, "After operating the voluntary retirement program in the MS Business Division last month, we reviewed the need for workforce circulation in other divisions as well," adding, "Some employees expressed opinions about providing equal opportunities, so we decided to offer the application opportunity to those interested in other divisions as well."

This is the first time in two years, since 2023, that LG Electronics has implemented a voluntary retirement program across all business divisions. This move is interpreted as a response to growing concerns over poor performance in the domestic electronics industry this year, driven by intensified price competition from Chinese companies and the escalation of global tariff wars originating from the United States. In the second quarter of this year, LG Electronics' operating profit was 639.4 billion won, a 46.6% decrease compared to the same period last year. According to FnGuide, LG Electronics' operating profit for this year is projected to be 2.6834 trillion won, down about 21% from last year's 3.4197 trillion won.