LG Electronics increased the size of its mobile unit over the course of Q4 2016 while its domestic rival Samsung reduced the workforce of its mobile business for the fourth consecutive quarter, new regulatory filings suggest, as reported by The Korea Herald. As of the final quarter of last year, LG’s smartphone division was employing 6,790 people, 18.8 percent more compared to the previous quarter. The change comes after a relatively long period during which the Seoul-based tech giant was reducing the size of its handset manufacturing operations following numerous quarters of disappointing performance partially caused by the LG G4 and the LG G5, neither of which managed to attract a massive audience. Back in Q1 2015, LG’s mobile unit was 8,049 people strong, but that peak number started falling and the trend wasn’t reversed until recently.
For reference, Samsung’s IT and Mobile unit reduced the size of its staff by 0.6 percent between the third and fourth quarter of 2016. LG’s largest domestic rival still employs significantly more people, with its mobile business having 26,398 workers, according to the latest regulatory filing. Coincidentally, Samsung’s mobile workforce has also been decreasing in size since 2015, though it reached its peak somewhat later than LG, in Q4 2015. Industry analysts believe Samsung’s number of employees is diminishing primarily due to the company’s efforts to restructure its mobile operations in an effort to make them more efficient and compete with premium phone makers like LG and Apple, but also with Chinese original equipment manufacturers (OEMs).
Previous downsizings of LG’s mobile division weren’t prompted by similar reasons and were instead directly caused by the poor commercial performance of the company’s flagship products, industry watchers said. As the firm’s mobile unit was unable to deliver a hit flagship, its profit margins suffered and led to workforce cuts, though that trend might be reversed if the LG G6 manages to do better than its last two predecessors. LG’s latest high-end smartphone has been retailing in South Korea for a while now and is reportedly doing well, while its Western debut is scheduled for Friday, April 7. On the other hand, Samsung’s Galaxy S8 and Galaxy S8 Plus are slated to launch worldwide on April 21 and will be directly competing with LG’s new offering.