SEOUL, Sept. 17 (Korea Bizwire) — LG Display Co. said Tuesday it will begin a voluntary retirement program as part of cost-cutting efforts amid mounting losses from its liquid crystal display (LCD) business.
The display making unit of LG Electronics Inc. said it will accept early retirement from manufacturing employees who have worked over five years and will consider taking applications from office workers later.
LG Display said the retirement program is part of its cost-cutting efforts and transition from money-losing LCDs to a more profitable organic light-emitting diode (OLED) business.
“LG Display has been in emergency management mode due to the worsening business environment and profits amid falling LCD prices and toughening global competition driven by Chinese manufacturers,” the company said in a statement.
“It is urgent to carry out fundamental restructuring by shifting from the struggling LCD business to OLED.”
The latest move comes one day after LG Display named LG Chem Ltd. President Jeong Ho-young as its new CEO to replace incumbent chief Han Sang-beom.
LG Display’s net losses deepened to 613 billion won (US$518 million) in the first half of the year from 350 billion won in the year-ago period due mainly to tougher competition with Chinese rivals.
To improve profits, the panel maker has been expanding investment in OLED panels, recently completing the construction of a new OLED factory in China.
The company said it plans to roll out 60,000 OLED sheets per month at the Guangzhou factory in the initial stage, which would increase its total monthly OLED sheet output capacity to 130,000 units this year when combined with its production line at its South Korean factory in Paju, north of Seoul.
The panel maker said it will ramp up its annual production at the two factories to over a combined 10 million by 2022.