In response to Chinese media reports that LG China is reducing staff, a representative from LG China says the company has not renewed labor contracts with about 11% of its staff whose contracts have expired, but this is a normal human resource adjustment.

Han Xue, public relations representative of LG China, has said LG's move is not a staff reduction and it is instead a human resource adjustment. Han says that since Nam K. Woo took over the positions of president and CEO of LG Electronics China, the company has launched a series of new strategies. In order to carry out these strategies, they have had to make some personnel adjustments by simplifying each of their functional departments.

Statistics from LG's HR Department shows that the company has not renewed contracts with about 11% of the staff, but China media says that this rate is as high as 20% in some of their branches in China.

LG's adjustment might be related to its unsatisfactory performance worldwide. The first quarter financial report of LG shows that the company suffered a net loss of US$131 million in the period, which was the worst since the fourth quarter of 2003.

LG entered China market in 1993. Since then it has invested more than US$2 billion here.