Seoul, September 26 (Reuters) – South Korean battery maker SK On announced plans to introduce voluntary redundancy programs aimed at reducing its workforce. The move is part of the company’s efforts to improve efficiency and remain competitive as the electric vehicle (EV) market faces growing challenges. SK On, a subsidiary of SK Innovation, supplies batteries to major automakers including Ford, Hyundai, and Volkswagen.
This decision comes as the latest indication of the impact of slowing EV sales on battery manufacturers globally. The company stated that it will offer special leave and voluntary departure options to employees as part of a broader efficiency drive. “These are proactive measures to establish a lean, agile workforce, so that we can better navigate shifting EV market conditions,” SK On said in a statement.
While the company continues to focus on improving efficiency and securing a foundation for sustainable growth, it remains fully committed to supporting the career development of its employees, acknowledging their contributions to SK On’s rise as a top-tier battery maker.
Global EV Market Facing Challenges
The slowdown in the EV market has impacted not just SK On, but also other battery manufacturers and automakers around the world. Ford, General Motors, and other carmakers have delayed or canceled new electric models due to slower-than-expected consumer demand. Earlier this week, Northvolt, one of Europe’s largest EV battery producers, announced plans to cut 1,600 jobs at its Sweden headquarters, representing one-fifth of its global workforce. The company has been grappling with production issues, sluggish demand, and fierce competition from Chinese firms.
As part of its efficiency measures, SK On will offer a voluntary package to employees who agree to leave, including paying 50% of their salaries to those who joined the company before November last year as an early retirement incentive. According to regulatory filings, SK On employed 3,558 people as of the end of June this year.
Financial Struggles and Future Outlook
SK On has yet to achieve profitability since it was spun off from parent company SK Innovation in 2021. In the April-June quarter of this year, the company posted an operating loss of 460 billion won ($346.10 million), compared to a 332 billion won loss in the previous quarter. Following the announcement of the job cuts, SK Innovation’s shares fell 0.9%, underperforming the broader Korean market, where the KOSPI benchmark index rose 2.1%.
Despite its financial struggles, SK On remains committed to enhancing its operational efficiency and optimizing its workforce to remain competitive in an increasingly challenging market. The company aims to balance its efforts to invest in research and development while expanding its market share in the global EV battery sector.
By cutting jobs and streamlining its workforce, SK On is positioning itself to weather the turbulent period in the EV market and emerge stronger as it navigates future growth opportunities. As the demand for electric vehicles fluctuates and competition intensifies, companies like SK On must adapt to evolving market conditions while maintaining their technological and manufacturing capabilities.
