October 4, 2024: South Korean battery maker SK On, said last week that it plans to cut its workforce with the company’s first voluntary retirement scheme since its launch as it continues to struggle in a challenging EV market.
The world’s fifth-largest electric vehicle battery maker will offer the early retirement program for all employees who joined the company before November 2023, according to industry sources. The company is set to provide 50% of annual salaries and short-term incentives to applicants of the scheme.
SK On, which supplies EV batteries to Ford, Hyundai and Volkswagen, among others, is the latest battery maker to bear the brunt of sustained weakness in the global EV industry.
The company, the battery subsidiary of South Korea’s top energy group, SK Innovation, reported a record quarterly operating loss of 460.1 billion won ($346.3 million) in the April-June period, extending its losing streak to 11 straight quarters. The firm said it plans to offer special leave and voluntary departure options as part of an efficiency scheme.
“These are proactive measures to establish a lean, agile workforce, so that we can better navigate shifting EV market conditions,” SK On said.
“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 in becoming a top-tier battery maker.”
SK On has taken various measures to cut expenses such as requiring executives to take economizing classes for overseas business trips. The company has also decided to freeze the salaries of all executives until it turns to the black.
They are not the only firm to feel the effects of faltering EV sales. Ford, GM and other car makers are delaying or cancelling new electric models to avoid spending heavily on vehicles that consumers are not buying as quickly as anticipated.
Just last week, Swedish battery maker, Northvolt — Europe’s biggest hope in the EV battery market — also said it plans to cut 1,600 jobs at its base in Sweden as it struggles with production problems, sluggish demand and competition from China.
