South Korean firm LG Display Co Ltd has rolled out a voluntary redundancy program on Tuesday as it faces rising losses. The company provided the financial incentive to its domestic employees to encourage them to resign voluntarily.
After an emergency board meeting, chief executive Han Sang-beom of the company, which is a display screen supplier for Apple, stepped down from his position. Subsequently, the announcement of the voluntary redundancy program was made the next day.
The display screen maker did not specify the number of workers it expects to receive in the voluntary redundancy program. The South Korean firm has 23,000 production line workers in its domestic facilities.
The company has been harmed heavily due to the excessive supply of liquid-screen displays (LCDs), which has reduced their prices. The prices are cutting into the earnings of the company and the problem has persisted for a while.
LG Display is hence moving towards organic light-emitting diode (OLED) panels from its LCD business. However, the production of OLEDs incurs high costs. But the company also faces heavy competition from Chinese rivals in the LCD panel market.
Jean Lee, a spokeswoman of the company, said that the cut in jobs at the domestic facilities was a move to increase the cost efficiencies in the production process and to keep expenses in check, which were part of an emergency plan.
The company would be receiving voluntary redundancy applications from its employees for the next few weeks from workers who have been working for over 5 years. It currently employs about 59,000 workers around the world in its facilities.