South Korea’s LG Electronics Inc aims to cut $2.2 billion in costs and expects about a 20% sales decline in dollar terms this year amid the spreading global recession, its chief executive said on Monday.
LG, which makes mobile phones, televisions and appliances, has no immediate plans for job cuts but may eliminate some jobs as it reorganizes global production bases, CEO Nam Yong told a news conference. The company has about 82,000 employees worldwide.
“In dollar terms, we saw sales falling 17% in January. Sales fell 20% in November. [The figure] for the year is likely to be around that level,” Nam said, when asked about the 2009 sales outlook.
Although LG is benefiting from a weak won (KRW) currency, which gives it an edge in price competition with rivals in Japan and other countries, the company is taking steps to cut costs by about KRW 3 trillion ($2.19 billion) this year, Nam said.
Nam also said LG is interested in acquisitions, without specifying targets or business areas. He reiterated that LG was not interested in Hynix Semiconductor Inc, whose controlling stake was put up for sale by local shareholders.
LG posted a record quarterly net loss in October-December, hit by a big shortfall at its LCD venture, LG Display Co Ltd. Profits from its mobile phones are also weakening as demand sags and competition heightens. (Reuters)