LG Electronics is reportedly considering leaving the smartphone market after losing around $4.5 billion over the last five years.
According to a report by The Korea Herald, LG CEO Kwon Bong-seok sent out a memo to his staff hinting that "there would be a major change in the operation of the smartphone segment."
“Regardless of any change in the direction of the smartphone business operation, the employment will be maintained, so there is no need to worry,” he said.
An LG official later explained to the publication that the "company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”
“Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice,” the official said.
The report, according to rumors, claimed that around 60 percent of the company’s staff would be reassigned to other business units either within LG or its affiliates.
Prior to this, the Korean tech company earlier refuted a report by Korean publication The Elec, which claimed that LG is exiting the smartphone business. The company, in a statement sent to Android Police, branded the report as “completely false and without merit.”
Kwon, who assumed office in January 2020, earlier vowed that the company’s mobile department will be profitable by 2021.
“I can say we can make that happen as LG Electronics will expand our mobile lineup and steadily release new ones attached with some wow factors to woo consumers,” Bong-seok told reporters during a press conference.
Last year, the company launched two flagship devices – the LG Velvet and LG Wing - in a bid to compete with smartphone powerhouses like Samsung, Apple and other Chinese smartphone manufacturers such as Xiaomi, Huawei and Vivo.
During CES 2021, LG briefly demonstrated the “unique resizable screen” of its LG Rollable smartphone. The company’s rollable device is said to be an exploratory look at what the future of smartphones may bring.