LG Electronics has decided to withdraw from the mobile phone business. The business size is 5.2171 trillion won, so although there will be a large short-term loss, it is expected to have an effect of improving the business structure and financial structure in the long term.

LG Electronics held a board meeting on the 5th and decided to end production and sales of the MC business division (mobile phone business). It also announced a suspension of business. Accordingly, in accordance with Article 40 of the Stock Market Disclosure Regulations, trading of LG Electronics shares was suspended for 30 minutes from 10:29 AM to 10:59 AM on April 5.

LG Electronics stated that the withdrawal from this business was due to intensifying competition in the mobile phone business and continued sluggish business performance, and that it was focusing its capabilities on its core businesses and improving its business structure by improving the efficiency of internal resources.

It also said that it will improve its business portfolio through selection and concentration in the future.

The business suspension date is July 31, 2021, and the MC business division's sales volume is KRW 5.2171 trillion, which is equivalent to 8.2% of LG Electronics' total sales.

An LG official said, “The termination of the MC business may result in a decrease in company-wide sales in the short term, but in the mid to long term, it is expected to have an effect of improving the business structure and financial structure.”

In addition, LG Electronics plans to produce mobile phones until the end of May to supply the promised quantity so that mobile phone buyers and existing users do not experience any inconvenience.

In addition, we will continue to provide sufficient after-sales service so that purchasing customers and existing users do not experience any inconvenience even after the business is terminated, and we will continue to negotiate to reasonably compensate for any losses suffered by business partners and partners.

Regarding the MC division employees, which number approximately 3,700, the company plans to reassign them in a comprehensive manner, taking into account the human resources needs of other LG Electronics divisions and LG affiliates, in order to maintain employment without restructuring.