SEOUL — South Korean battery manufacturer SK On announced on Thursday its decision to implement voluntary measures aimed at reducing its workforce. This strategic move is intended to enhance efficiency and maintain competitiveness in the increasingly challenging electric vehicle (EV) market.
As the battery unit of SK Innovation, SK On outlined its plan to introduce programs that offer special leave and voluntary departure options for employees. “These are proactive measures to establish a lean, agile workforce so that we can better navigate shifting EV market conditions,” the company stated in its announcement.
Despite facing a downturn in battery shipments due to a global slowdown in EV sales, SK On remains committed to supporting the career development of its employees. The company acknowledged the vital role its workforce has played in its ascent as a leading battery maker, stating, “While the company pushes to improve efficiency and secure grounds for sustainable growth, we are fully committed to supporting the career development of our employees who have contributed to our success.”
The challenges SK On faces are reflective of broader industry trends, as major automakers like Ford and General Motors have delayed or cancelled new electric vehicle models. These decisions come in response to sluggish consumer demand, prompting car manufacturers to reassess their investments in electric vehicles.
To further its efficiency goals, SK On plans to offer a voluntary package to employees willing to leave the company. This package includes an early retirement option for those who joined prior to November last year, with eligible employees receiving 50 percent of their salaries.
As of the end of June, SK On had a workforce of 3,558 employees, according to regulatory filings. The company has yet to turn a profit since its split from SK Innovation in 2021. In the second quarter of this year, SK On reported an operating loss of 460 billion won (approximately $346.10 million), compared to a loss of 332 billion won in the previous quarter.
Following the announcement, shares of SK Innovation experienced a decline of 0.9 percent, while the benchmark KOSPI index rose by 2.1 percent.
In summary, SK On’s workforce reduction initiative underscores the company’s strategic response to the evolving EV market landscape, highlighting the ongoing challenges faced by battery manufacturers in securing profitability amidst changing consumer preferences.
