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LG Responds To Mobile Restructure G5, Not Solely Responsible

LG has responded to our story yesterday about the problems that their mobile business is facing.

The Company has admitted that poor sales of the new LG G5 were partly to blame for the company’s recent corporate restructuring, however they claim that that the G5 was not “solely” responsible for the decline in fortunes at the mobile division. They also said that no senior management were retrenched.

Executives in Korea claimed that “The purpose of the realignment is to create an optimised and agile organisation that can deliver greater performance going forward.”

G’s mobile division has posted an operating loss for three quarters in a row, which is piling pressure on the South Korean tech giant. According to Gartner, LG ranked seventh in global smartphone sales for the first quarter of 2016, holding a sub-4% share of the market, behind rivals Samsung, Apple, and Huawei.

The latest LG statement said “The purpose of the realignment was intended to keep LG’s handset business running amid challenging market situations”.

The job cuts were reportedly intended to “reduce fixed costs at a critical time when the firm needs to improve profit”.

But an LG spokesperson said that some global reports including in the Korean Herald “related to the recent managerial changes” were “inaccurate”.

“The evolving management structure is not unusual in our business in today’s competitive smartphone environment,” the spokesperson added. “In a large, complex business like the LG Mobile Communications Company, continuous improvement and fresh, innovating thinking will always be prioritised.”

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