LG Display headcount falls by nearly 1,000 in six months after voluntary retirement drive

LG Display's workforce shrank by nearly 1,000 employees in six months, a reduction attributed to a voluntary retirement program the company launched in the second quarter to streamline costs.

The program saddled LG Display with a second-quarter operating loss, but the company plans to restore profitability in the second half by riding the seasonal launch of Apple's new iPhone lineup and expanding sales of large-screen OLED panels.

According to LG Display's semiannual report released Saturday, the company had 23,490 employees at the end of the first half of this year, down 940 from 24,430 at the end of last year.

The voluntary retirement program began in April, targeting blue-collar workers with at least five years of service and white-collar employees who had worked at the company for 20 or more years or were at least 45 years old.

The company signaled a strong commitment to workforce reduction by offering what it described as its most generous severance package ever — a retirement allowance of up to three years' salary along with tuition support for employees' children.

LG Display addressed the outcome of the program during its second-quarter earnings conference call on July 22.

Chief Financial Officer Kim Sung-hyun, an executive vice president, said the company pursued the restructuring "with the resolve to make it effectively the last of its kind," adding that the enhanced voluntary retirement package resulted in a one-time charge of 240 billion won ($170 million).

The impact is visible in the company's first-half selling, general and administrative expenses, which rose 29 percent year-on-year to 827.9 billion won from 644 billion won in the same period last year. Salaries accounted for the largest share of those expenses, surging 87 percent to 408.5 billion won from 217.7 billion won a year earlier.

The one-time charge pushed LG Display to an operating loss of 108 billion won in the second quarter. For the full first half, however, the company held on to a slim operating profit of 39 billion won.

LG Display has been steadily cutting its workforce after suffering trillion-won losses over the past several years. The company carried out two separate voluntary retirement rounds for production and technical staff last year as well.

As a result, headcount has declined steadily — from nearly 28,000 at the end of 2023 to the mid-20,000s by the end of 2024, and now into the low 23,000s at the close of the first half.

Industry analysts say LG Display will need to trim its workforce further — to the low 20,000s — before it achieves the cost efficiency it is targeting. The benchmark they point to is Samsung Display.

Samsung Display does not file a semiannual report, making it difficult to track its mid-year headcount, but the company had 21,243 employees at the end of last year and has kept its workforce in the low 21,000s for several years running.

Samsung Display posted sales of 14.2 trillion won and an operating profit of around 1.1 trillion won in the first half of this year. LG Display's sales over the same period came to roughly 11.1 trillion won, suggesting — on a simple revenue comparison — that LG Display still has room to reduce its headcount further.

LG Display is heading into a seasonal peak in the second half, coinciding with Apple's new iPhone launch. While rising component costs — a phenomenon the industry has dubbed "chipflation" — continue to cloud mobile demand, the company expects high-end smartphone demand to remain solid.

On the large-panel side, LG Display is targeting the premium market with OLED technology it has built up over many years. Gaming monitors, a segment that has recently begun to take off in earnest, represent another growth driver.

The company projects that OLED monitors will account for about 20 percent of its large OLED shipments this year, up from the low double digits last year.