SK continues tightening belt in battery business
SK Group has ramped up efforts to cut costs at its money-losing battery affiliates as they continue to underperform amid a slowdown in global demand for electric vehicles (EVs).
According to industry officials Monday, SKC has notified employees of plans to launch a voluntary redundancy program for workers who joined the company before 2025, offering compensation equal to 50 percent of their annual salary.
The decision is seen as part of broader efforts to cope with the battery market downturn. SKC is the parent company of SK Nexilis, a copper foil producer for rechargeable batteries. Last year, SK Nexilis posted an operating loss of 174.6 billion won ($117 million), following a 150.5 billion won loss the previous year.
SK IE Technology (SKIET) has also launched a voluntary redundancy program for employees with more than three years of service, offering compensation equivalent to one year’s salary. Spun off from SK Innovation in 2019, SKIET produces separators for lithium-ion batteries.
The battery materials maker has also allowed staff with more than two years of service to take unpaid leave for periods ranging from six months to two years. The company introduced this measure following its announcement last August of a self-rescue plan to mitigate a market slump.
At the time, SKIET said the unpaid leave program was a preemptive response to slow market growth and growing uncertainty. Last year, the separator producer posted an operating loss of 246.3 billion won, after losing 291 billion won the previous year.
Securities analysts expect another operating loss this year.
KB Securities analyst Lee Chang-min said,
Because the Trump administration continues to ostracize eco-friendly vehicles, it will be difficult to see a recovery in EV sales in the U.S. market anytime soon,
“Fierce competition with Chinese manufacturers will also limit the growth of Korean battery sales in Europe.”
SK On, the group’s battery manufacturing subsidiary and the main customer of SKIET, also carried out a voluntary redundancy program last month and began offering unpaid leave to employees who joined the company before 2025.
The downsizing came less than two years after SK On took similar steps in September 2024.
Earlier this month, SK Battery America said it laid off 958 of its 2,566 workers at its plant in the U.S. state of Georgia, citing slowing EV demand and changes in market conditions.
The factory once supplied batteries for Ford Motor’s F-150 Lightning, but profitability at the U.S. subsidiary of SK On was hit after the carmaker halted production of the electric pickup. Last December, SK On and Ford agreed to dissolve their U.S. joint venture.
The company said in a statement,
To align operations to market conditions, SK Battery America has made the difficult decision to reduce our workforce,
Since being spun off from SK Innovation in 2021, SK On has never posted an annual operating profit. Last year, it recorded an operating loss of 931.9 billion won, following a loss of 1.1 trillion won the previous year.
Amid mounting losses, Industry Minister Kim Jung-kwan questioned the viability of maintaining three battery makers in Korea, sparking speculation that the government might pressure SK to exit the battery business.
However, the industry ministry denied such speculation, while SK On pledged to break even this year with its recent winning of a large-scale government order for energy storage system batteries.
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SK continues tightening belt in battery business, source
