LG Electronics on Thursday enacted a major leadership shakeup that will see the company headed up by three representative directors. It hopes that the new directors will "strengthen the company as it enters the new year."
Control of the company will be split three ways between Jo Seong-jin, president and CEO of Home Appliances & Air Solutions, Juno Cho, president and CEO of Mobile Communications and David Jung, president and CFO. The restructuring is designed to make each of the component parts of LG more nimble and quicker to respond to market conditions.
The healthiest business areas for LG, according to its latest financial results are TV sales, which have experienced a resurgence over the last few months, as well as home appliances and vehicles components. Smartphones, though, are struggling.
LG needs to work out how to jump back onto the up escalator after poor smartphone sales this summer led to a 37 percent decline in net income from summer 2014, it reported in October. The challenge will now be tapping into new growth areas and allowing them room to flourish.
The South Korean tech conglomerate is split into four different businesses -- home entertainment, mobile communications, home appliances and vehicle components -- which will all gain more autonomy following the restructure.
LG expects its next high-growth areas to be energy, IT, B2B and its automotive business, according to a press release announcing the management changes. Freeing up these businesses will allow them more of an opportunity to excel independently without getting bogged down with the poorer performing areas.
LG isn't the only company struggling to get consumers enthused about smartphones the way they used to be. Samsung and Sony have also suffered from falling smartphone sales and making mobiles is no longer the fail-safe option for boosting profits.