LG Electronics is accepting voluntary retirement applications from employees aged 50 and older and low performers across all divisions. As concerns grow that overall operating profit will decline not only in the TV business but across the company due to the global economic downturn and low-price offensives from China, the move appears to be a companywide push to streamline its workforce.
According to the industry on the 17th, LG Electronics is implementing voluntary retirement for employees who are 50 or older or have recorded low performance for several years. In addition to statutory severance pay, the company will provide consolation money equivalent to up to three years of annual salary, depending on years of service and the period remaining until mandatory retirement, as well as up to two years of children's tuition support.
The targets include all business divisions, such as the HS Business Headquarters (home appliances), MS Business Headquarters (TVs), VS Business Headquarters (vehicle components), and ES Business Headquarters (heating, ventilation and air conditioning).
Earlier, LG Electronics implemented voluntary retirement first in the MS Business Headquarters last month. The MS Business Headquarters was the only one to post an operating loss in the second quarter, logging 191.7 billion won.
It has been two years since 2023 that LG Electronics conducted voluntary retirement across all divisions. This move is seen as stemming from heightened crisis awareness over this year's poor results in Korea's electronics industry, as low-price offensives by Chinese corporations have combined with a global tariff war originating in the United States.
Samsung Electronics has also moved to streamline its workforce, expanding its voluntary retirement offer—previously aimed at those at the Director General level and above—in the Visual Display (VD) Division, which handles the TV business. It is also known to have begun a management diagnosis of the VD Division recently, seeking alternatives to overcome the crisis.
The Trump administration is currently imposing a 50% tariff on steel and aluminum and applying the same level of tariff to steel used in home appliances such as refrigerators, dryers, washing machines, and dishwashers. On top of that, with tariffs of up to 50% signaled on steel and home appliances from Mexico, uncertainty for corporations has increased further.
The securities industry projected that LG Electronics' operating profit this year will be 2.6834 trillion won, down about 21% from 3.4197 trillion won last year.