Major management reshuffle at floundering LG DisplayLG Display overhauled its management structure Monday to try to reverse its flagging profitability.
The world’s second-largest flat panel producer has scrapped a mobile organic light-emitting diode (OLED) division, which it ambitiously launched in June of 2008. The division’s two key products -- LCDs for mobile handsets and OLEDs, the next-generation alternative to LCDs -- were split and given to two existing divisions.
LCDs have been placed under the IT division, which is responsible for panels for monitors, laptops and tablet PCs. The OLED business has gone directly under Yeo Sang-duk, who formerly headed the mobile OLED division and has been promoted as chief technology officer. The CTO is mainly responsible for R&D.
The management restructuring is “aimed at boosting tension across the firm and competitiveness,” said the LG Group in a release.
Last Friday company CEO Han Sang-beom pledged in front of executives to reform “everything to the bone.”
Executive-level relocations have also taken place and the company is reshuffling lower-level employees, according to sources familiar with the situation. Although the company did not specifically mention laying off employees as part of the process, there should be almost 100 employees laid off, industry watchers project.
LG Display has suffered operating losses in the past six consecutive quarters. In the first three months of this year, its operating loss stood at 178 billion won ($158 million). The prices of liquid crystal display panels, its core product, have been falling amid a worldwide oversupply. Global TV shipments also declined last year for the first time in seven years, according to market researcher DisplaySearch. LCD panel prices hit bottom in April but there’s little momentum for a price rebound, analysts say.
The company’s failure to ship panels for the initial batch of new iPads, unveiled in March, after Apple said the panels had tentative glitches that fell below its quality requirements, also dealt a blow. LG’s panel supplies to Apple was normalized in April.
Korea Investment Securities predicts LG will ship 8 million panels for the new iPad in the second quarter.
LG Electronics, its sister company and key client, is set to unveil a 55-inch OLED TV this month. But LG Display has yet to set a date for mass producing OLED panels although it has been aiming at the second half by switching some of its LCD capacity to OLEDs.
In a related move, LG Group Chairman Koo Bon-moo told LG executives at a seminar at its headquarters in Western Seoul that “fundamental reform is impending for LG.”
Its shares ended 0.6 percent higher yesterday at 23,750 won.
by Seo Ji-eun [firstname.lastname@example.org]
More in Industry
Government, mobile carriers agree frequency redistribution price
Futures at stake, marketers see opportunity in CSAT
Aekyung Group makes executive appointments
Lotte Mart slammed for illegally kicking out trainee guide dog
It's tough at the top, and many would prefer not to try