LG is reportedly planning to shut down the smartphone business because of the rapid decline in sales and unable to find any buyers. LG tried to sell off their smartphone business but there were no takers. Hence, the management has decided to shut down the smartphone business if the attempts to sell off the company fail. LG is planning to inform the decision to shut down the smartphone business to employees in May followed by massive layoff in the smartphone manufacturing and production line. With pricey and outdated hardware, LG smartphone business has taken a massive hit over Chinese players like Xiaomi, Realme, Oppo, Vivo, and others.
LG had consultations with Vietnam’s Vingroup JSC and Germany’s Volkswagen AG to sell its smartphone department but the negotiations failed to achieve any momentum. The South Korea-based company has aborted plans to launch new smartphones including LG Rainbow and the LG rollable phone. It is to be noted that South Korea’s Chosun outlet has put on hold the launch of the LG Rainbow model because of the uncertainty. Even though the phone has been listed on Bluetooth SIG, the future is bleak for the Rainbow phone.
If LG shuts down the smartphone business, then it could relocate the workforce to other divisions such as home appliances and automobile parts. There will be layoff if the employees are not willing to work in these departments. However, the intensity of the layoff will be low because of the wide divisions run by the company. For instance, the refrigerator and washing machine businesses are running well and the employees from the smartphone unit could find an allocation there. Moreover the PC monitor and TV business are also running in full capacity.
According to reports, LG is still exploring the possibility of a sale and hopes that something concrete will happen. This will benefit the brand LG including the employees and stakeholders. A complete shutdown of the smartphone business will bring a negative impact on not only the company but also the industry.
