SK On to cut jobs for first time amid sustained EV weakness

Sep 26, 2024

The logo of SK On is pictured at its EV battery factory in Seosan, South Korea, October 19, 2023 (File photo by Reuters via Yonhap)

SK On Co., the world’s fifth-largest electric vehicle, plans to cut its workforce with the company’s first voluntary retirement scheme since its launch as it continues to struggle amid the sustained weakness in the global EV industry.

SK On decided to offer the early retirement program for all employees who joined the company before November 2023, according to industry sources on Thursday. The company is set to provide 50% of annual salaries and short-term incentives to applicants for the scheme.

The subsidiary of South Korea’s top energy company SK Innovation Co. 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 supplier to EVs by South Korea’s Hyundai Motor Co. and Kia Corp., as well as the US Ford Motor Co., suffered from the falling runs of global battery factories and the rising fixed costs after the operations of its new plant in Hungary.

COST CUTS

SK On has taken various measures to cut expenses such as requiring executives to take economy classes for overseas business trips. The company also decided to freeze the salaries of all executives until it turns to the black.

SK On aims to report a profit from the battery business in the second half, excluding earnings from SK Trading International Co., the parent’s oil and petroleum product trading unit, with which the battery manufacturer will merge.

For the profit target, SK On plans to manufacture batteries for Hyundai and Kia’s EV models at a production line for Ford’s EVs at its plant in the US state of Georgia.

Those batteries will be supplied to the world’s third-largest automaker’s US EV hub in Bryan County, which is scheduled to start operations next month.

By Hyung-Kyu Kim

khk@hankyung.com

Jongwoo Cheon edited this article.

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SK On to cut jobs for first time amid sustained EV weakness

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