LGD streamlines some LCD production lines of P7 and P8 in Paju and is considering voluntary resignation

by:Kimeery     2021-06-05

According to relevant industry news on August 2, LGD’s management has recently been considering a streamlining of organizations including voluntary resignations in order to improve operating efficiency due to the deterioration of its ongoing operating conditions and poor performance. Plans for voluntary resignation, reduction of staff, and reorganization of the P7 and P8 LCD production lines in Paju are under study. Last month, LGD decided to invest 3 trillion won in the Paju P10 plant, a new production base for OLED panels, and plans to accelerate the transition from LCD to LCD for Samsung business through operational efficiency.

First of all, in order to simplify the organization, plans are being considered to achieve voluntary resignation and reduction in the number of employees.

Last year, LG showed that it had implemented a voluntary resignation system for production employees and adjusted more than 3,000 employees due to the first operating loss in six years in the first quarter. This voluntary resignation will not only include production positions, but also clerical employees. The scale of rectification is expected to exceed that of last year. In addition, plans to reduce the number of employees by 20 to 30% through organizational integration are also being considered.

In addition, in order to reduce unnecessary expenses, plans to adjust overseas dispatched personnel and reduce activity expenses and travel expenses are also under consideration.

Due to the low-price offensive of Chinese manufacturers, LGD is considering interrupting part of the current Paju P7 and P8 production lines in the LCD business, which is deteriorating profitability, and shifting to the OLED production line.

In this regard, the company's relevant person said that 'the company's situation is not optimistic. From the cost reduction and operation efficiency plan, it is indeed considering a variety of plansSpecific decision.'

Previously, LGD announced its second-quarter results, with sales of 535.34 billion won (approximately RMB 30.8 billion) and an operating loss of 368.7 billion won (approximately RMB 2.1 billion). . Due to the deterioration of the profitability of the LCD business and the increase in expenditure due to the conversion of OLED, sales decreased by 5% and operating loss increased by 61.6%. In the case of consecutive losses from the first quarter of this year to the second quarter of this year, LGD’s share price has also fallen from 22,000 won on April 11 to 14,44 million won on the 1st of this month, a decrease of 35.1%.

Affected by the continued stagnation of demand in the global IT market, it is expected that the sluggish performance will continue into the second half of the year, and the possible long-term uncertainty will increase. In order to overcome the crisis, LGD has begun to consider diversified operational efficiency. Measures.

LGD focuses on the LCD business and implements organizational simplification and cost reduction programs. At the same time, in order to build a long-term stable income base, it will accelerate the conversion to the OLED business.

LGD announced an investment plan on the 23rd of last month to increase its investment by 3 trillion won in the G10.5 OLED panel production line at the P10 plant in Paju. In order to cultivate the OLED business to become the main business in the future, LGD has added a bargaining chip to the mainstream development of LCD for Samsung. The P10 production line in Paju and the G8.5 OLED production line in Guangzhou, China, which will be mass-produced this month, will lead the mainstream trend of OLED.

LGD Vice Chairman Han Sang-fan emphasized the mainstreaming of OLED and the maximization of LCD profitability at the “Company-wide Goals Achieving Decision Conference in 2019” held in April, saying that “this year is for a new leap of gold Time' last year'.

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