Things do not look very positive for LG as the South Korean phone maker announced a restructuring of its struggling mobile division, reports the Korea Times.
Through the restructure, LG created a Program Management Office (PMO) that will oversee the mobile division and inject “new momentum” into it by replacing some unnamed executives. The PMO, according to the report, has the authority to take care of strategies regarding manufacturing, marketing, product development, and sales. Juno Cho, president and CEO of LG’s mobile division, will oversee the PMO, while former research lab head Oh Hyung-hoon will be in charge of the office.
Furthermore, Ha Jeong-wook, LG’s mobile division vice president, will act as support for Hyung-hoon, while LG senior vice-president Kim Hyung-jeong will take charge of LG’s mobile research lab.
“The overseas business unit at the mobile division will take a bigger role,” said LG. “The purpose of the realignment was intended to keep LG’s handset business running amid challenging market situations.”
The main reason behind the restructuring, LG said rather frankly, is the underwhelming reception of the G5. Simply put, the G5 has not sold nearly as well as the company wanted it to, which might be due to a combination of factors, including a lack of marketing and awareness.
Alas, LG’s mobile division restructuring is not unprecedented, seeing how the company is rumored to post another quarter of losses. Those losses have led to LG’s position in the phone market continually falling, with the company now occupying less than 4 percent of the market in terms of sales. Furthermore, LG recently moved a few hundred employees from its mobile division to its vehicle component division, a move seen as LG’s attempt to reduce fixed costs.
We should learn even more about LG’s phone struggles in its second quarter fiscal results, which should be released sometime soon.