According to Reuters, on September 26, SK On, a battery manufacturing subsidiary of South Korea's SK Innovation, announced plans to implement a voluntary layoff program to reduce staff numbers, aiming to enhance efficiency and maintain competitiveness in the fiercely competitive electric vehicle market.
In a statement, SK On mentioned that as part of its efficiency improvement plan, it will offer special leave and voluntary resignation options. "This is a proactive measure to establish a streamlined and flexible workforce, enabling SK On to better respond to the ever-changing electric vehicle market. While striving to improve efficiency and lay the foundation for sustainable growth, SK On is also fully committed to supporting the career development of its employees, acknowledging and appreciating their contributions to SK On's goal of becoming a top battery manufacturer."
As one of the efficiency measures, SK On stated it would offer a voluntary resignation package to employees who agree to leave, including an additional 50% salary for those who joined the company before November of last year to encourage early retirement.
As of 3:57 AM GMT on September 26, SK Innovation's stock price had fallen by 0.9%, while the benchmark KOSPI index rose by 2.1%.
Regulatory filings show that SK On employed 3,558 staff as of the end of June. Since its spin-off from SK Innovation in 2021, SK On has struggled to achieve profitability. The company's financial report for the second quarter of this year (April to June) indicated an operating loss of 460 billion KRW (approximately $346.1 million), compared to an operating loss of 332 billion KRW in the previous quarter.
SK On supplies electric vehicle batteries to global automakers such as Ford, Hyundai, and Volkswagen and is the latest battery manufacturer affected by slowing electric vehicle sales.
Previously, automakers like Ford and General Motors have delayed or canceled the launch plans for new electric vehicle models to avoid heavy investments amid slower-than-expected consumer demand.
Additionally, Swedish battery manufacturer Northvolt also announced this week that it plans to lay off 1,600 employees (about one-fifth of its global workforce) at its Swedish headquarters due to production issues, weak demand, and competition from China.
