LG Electronics overhauls its Mobile Communications division

LG Electronics overhauls its Mobile Communications division. July. 02, 2016 07:18. by 김지현기자 jhk85@donga.com. LG Electronics has replaced more than 20 executives of its Mobile Communications (MC) division on Friday. An occasional reorganization of such a scale is rare in the firm, and the sluggish sales of its flagship G5 smartphone seems to be the behind the decision.

The G5 was launched in March this year, but recently saw its daily sales fall to less than 3,000, only one fifth of the initial level. “The measure was taken so that we can promptly rearrange to turn the situation around,” said a company official.

Cho Jun-ho, the chief of the MC division since November 2014 who led launches of G4, G5 and V10 models, has remained in position. The company established a new organization named Program Management Office (PMO) under Mr. Cho to oversee operations from product planning, development, manufacturing, marketing, to sales of premium models. Chief Executive Director Oh Hyung-hoon (former head of MC R&D Center) has been appointed to lead the PMO of the "G series," while Managing Director Ha Jung-wook will be in charge of the "V series." Lower-end products will be supervised by the Basic-tier Device (BTD) Unit, which launched last month.

The sales unit of the MC division has shrunk to less than half in size. Domestic sales team will be integrated with the Korea Sales unit, which is responsible for domestic sales of all electronics, and the MC division will only take care of overseas sales. LG Group is also working to move the MC human resources to other business units or affiliates.   

The division is expected to have seen operation loss of more than 100 billion won in the second quarter following the first.