LG Electronics Inc. will reorganize its business operations next month in an effort to strengthen its competitive edge and provide for the future, the company said Tuesday.
The business shakeup comes as LG, the world's third-largest mobile phone maker, is struggling with falling earnings. In the third quarter, the
company posted a 99.2 percent on-year plunge in net income due to its ailing handset business.
Under the first business reorganization since a new chief executive officer took office two months ago, LG, also the world's No. 2 TV maker
after Samsung Electronics Co., will reduce five business divisions to four, effective Wednesday.
The four divisions are home entertainment that produces flat-screen TVs, mobile communications that manufactures mobile phones, home appliance and air-conditioning and energy solution.
The company will dissolve its business solution division, which produced flat-screen display products for corporate customers and automakers. The home entertainment division will absorb a flat-screen monitor making team
from the business solution division.
LG will also rename the air-conditioning division as the air-conditioning and energy solution division, which will take over the light emitting diode (LED) and solar businesses.
"The reorganization is designed to facilitate swift decision-making and also to reinforce the company's marketing edge," the company said in a
statement.
LG will create two teams tasked with overall management and global marketing that report directly to chief executive Koo Bon-joon, a member of founding family who succeeded Nam Yong in October after he stepped down, holding himself responsible for the company's loss-making mobile business.
The company added that it will not extend its contracts with five non-Korean C-suite officials Nam hired from outside of LG.