LG Display cuts staff
April 6, 2020
By Chris Forrester
LG Display’s problems are based in China – not from the Coronavirus, although that isn’t helping – but from lower-cost Chinese-made TV panels.
LG Display’s annual report, issued on April 2nd, stated that its payroll at December 31st 2019 stood at 26,665 staff, and down 12.4 per cent on the previous year’s 30,438. It is probably less today as LG Display adjusts to a slow-down in the public’s buying habits, closed retail outlets and lack of international distribution.
The lay-offs last year took the business to its lowest staffing levels since 2009 and the only year when levels have fallen below 30,000.
Then there’s the Virus. LG Display admits that even its cash-cow and lucrative large OLED screens have seen market demand suffer. Not helping is that 2020 is a ‘quadrennial year’ when the combined might of key sporting event, not least the Olympics as well as the US Presidential elections have in past quadrennial years led to a surge in demand for higher-specified TVs.
Data from Omdia (the former IHS Markit) says that the global TV market will shrink this year, and OLED TV sales will increase by a mere 500,000 units on-year to 3.5 million units.
LG Display says its operating loss guidance for this current quarter-year (to the end of March) has been adjusted upward from 357 billion Won to 475 billion Won.
Deutsche Bank’s Financial Investment report warned LCD TV panel prices are likely to fall again in the second quarter of this year, as it is expected to take more time for LG’s Chinese factory in Guangzhou to return to normal operation. It forecast the company’s operating loss this year will double to 1.06 trillion Won from its early estimate of 575.8 billion Won.