updated 06:10 am EDT, Fri September 9, 2011
LG dismisses rumors of 30% mobile staff cuts
LG has dismissed a report that suggested it was planning to shed 30 percent of its workforce in response to poorer than expected mobile device sales. The Korea Economic Daily had claimed that to stem losses from its mobile devices division, LG was planning on reducing its global mobile marketing, purchasing resources and its domestic mobile business. LG has responded by stating the rumours are groundless.
"We are always looking at opportunities to improve the performance of our mobile business but no decision has been made as to any job reductions," an LG spokesman told Reuters.
LG is the world's third largest mobile phone maker. However, it has recorded five consecutive quarterly losses from mobile phone sales. Part of the reason for this is that even though it holds the number three spot, most of its sales come from feature phones, which have slim margins and are aimed at the lower end of the market.
LG was criticized for a strategy that initially shied away from entering the high-end smartphone market. While it has responded to this issue positively this year, being one of the first vendors to release a dual-core smartphone, it lost a lot of momentum in 2010 with no real answer to phones being developed by Samsung and HTC.