SEOUL: South Korean battery producer SK On Co. is offering employees voluntary measures meant to shrink its workforce, as the industry grapples with electric vehicle sales’ slowdown.
The package includes options for early retirement or unpaid leave to pursue a degree - with fees subsidised 50% by the company - SK On said in a statement today.
The offer is being made to employees based in South Korea who joined the company before November 2023, it said. The company has some 3,500 workers at its headquarters here.
"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.”
The plans come as SK On, which provides batteries to automakers including Ford Motor Co. and Hyundai Motor Co., grapples with sluggish demand growth for EVs.
The unlisted company, a unit of SK Innovation Co., has posted operating losses every quarter since 2021 amid an overseas expansion push.
Reuters first reported the news earlier today.
The troubles at the Korean battery maker is echoed at Europe's Northvolt AB.
Northvolt was supposed to power Europe’s response to the likes of Tesla Inc. and China’s fast-growing electric vehicle makers. Instead, the Swedish battery company is fighting to stay afloat.
As it faces a crushing liquidity crunch, the company’s creditors will meet toorrow to decide on freeing up funds critical to its survival.
Burning cash as it struggles to deliver the batteries it promised customers, Northvolt on Monday said it’s shedding a fifth of its global staff and suspending the expansion of its main factory in northern Sweden.
With Europe’s battery boom turning to bust, more pain may be in the offing.
"There will not be big enough demand to meet supply and Northvolt may very well be the first casualty of the market correction currently underway,” said Fredrik Erixon, director at the Brussels-based European Centre for International Political Economy.
At stake is Europe’s effort to build a critical industry in a global marketplace dominated by Chinese rivals like Contemporary Amperex Technology Co and BYD Co. that are selling batteries and EVs at unbeatable prices.
Northvolt’s woes also throw into question Europe’s ambitious push to build a self-reliant green economy.
