[News Space=Reporter seungwon lee] The fact that LG Electronics will implement voluntary retirement starting in September 2025 for employees over 50 years of age and employees with low performance over the past three years, starting with the MS (Media Entertainment Solutions) division in charge of the TV business, is sending shockwaves through the industry.

Although they touted a virtuous cycle of human resources and enhanced competitiveness, the analysis suggests that belt tightening is becoming a reality due to a combination of serious deterioration in performance, an aging workforce, and global negative factors.

An LG Electronics official explained, "Emergency retirement is only offered if the individual so desires it," and added, "It is part of our transformation into a young and dynamic organization and to strengthen our competitiveness." In fact, the number of employees aged 50 and older has surged by 23.7% over the past two years, reaching 11,993 (16.3%), while the number of employees aged 30 to 49, the core age group, has actually decreased by 2.5%. LG Electronics has already paid out up to three years' worth of annual salary as severance pay to employees aged 55 and older in 2023, and this year, generous compensation is expected, including severance pay that varies by year of service and children's education funds.

The deteriorating performance is painfully evident. LG Electronics' operating profit in the second quarter of 2025 plunged 46.6% year-on-year to 639.4 billion won. In particular, the MS division recorded an operating loss of 191.7 billion won due to declining TV sales and intensifying competition from Chinese companies. Weak market demand, price cuts, and increased marketing expenses directly contributed to the deteriorating profitability. Consequently, LG Electronics is drastically reducing executive benefits and overseas travel expenses.

This restructuring crisis isn't just a problem for LG Electronics. The expansion of voluntary retirement programs across large corporations by 2025 is the result of a confluence of domestic and international challenges. LG Display implemented a voluntary retirement program for office workers aged 40 or older or in managerial positions, offering 30 months' base salary and tuition for their children. LG HelloVision also implemented its first voluntary retirement program, offering two years' salary for employees aged 50 or older or with at least 10 years of service.

Major conglomerates, including NCSoft, Shinsegae Duty Free, SK On, and KT, are implementing voluntary retirement programs, making workforce restructuring a common occurrence. KT, for example, offers up to 430 million won in benefits, with approximately one-sixth of its workforce applying.

The situation is similar overseas. Japan's Panasonic announced plans to cut 10,000 employees globally by March 2026, and Samsung Electronics is also considering a workforce reduction of up to 30%, focusing on Southeast Asia and overseas subsidiaries. This comprehensive restructuring is intertwined with sluggish performance, negative market conditions in China and North America, and increasing tariff burdens.

The Trump administration's recent tariff policies are also having a negative impact. With the imposition of high tariffs on North American and Chinese products starting in February 2025, key Korean export industries in the US, such as TVs, semiconductors, and automobiles, are expected to suffer. As of May, tariffs on Chinese electronics products had soared to 145%, and while some items were granted 90-day tariff reductions, uncertainty remains high. Korean companies also urgently need to prioritize strategic industries in their negotiations with the US.

Within large corporations, voices of self-reflection are emerging, realizing that long-term employment alone no longer guarantees corporate competitiveness. As repetitive restructuring practices targeting underperformers and those who have been overlooked for promotions have surfaced, the entire business world faces pressure to improve workforce efficiency and restructure its operations over time. LG Electronics' 2025 reorganization, approved by its board of directors, also focuses on restructuring its business units to achieve its future vision, including restructuring its business divisions, platform-based innovation, B2B, and securing new growth engines.

A business insider analyzed, "Amidst the ongoing economic downturn and domestic and international uncertainties since 2025, the wind of large-scale restructuring at Korea's major companies is ultimately spreading in a negative way, bringing about shock to employees, decline in consumer trust, and even social tension." "The shock of voluntary retirement caused by LG Electronics has clearly revealed the new reality of 'mid-level and senior executives being forced out' at large companies, and the true face of excessive restructuring for survival."