SK On moves to staunch losses with voluntary resignation scheme

Battery maker SK On is offering voluntary resignation packages in a bid to turn a profit this year for the first time ever by trimming its workforce.

SK On CEO Lee Seok-hee, center, tours the company's booth at InterBattery 2024 in southern Seoul in March. [YONHAP]

SK On is pushing to trim its workforce in a desperate move to reach profitability within the year as a stunning slump in EV sales growth lingers globally.

The money-losing battery maker said Thursday it is offering voluntary resignations to all salaried employees in Korea who joined the company before November of last year. The applicants will be offered 50 percent of their annual salaries plus a lump-sum cash payment.

Such a resignation scheme is one of the most common forms of workforce reduction in the country, which imposes strict legal guidelines on layoffs. This voluntary resignation offer is quite unique to those of other firms in that they normally apply to employees with more years of working experience.

SK On is also offering unpaid leave programs, covering 50 percent of tuition for those who start academic degrees during their leave for up to two years. If they return to SK after completing the degrees in sectors related to their work, SK will cover another 50 percent of tuition fees.

The BlueOval SK Battery Park Kentucky in Glendale, Kentucky is a joint venture between SK On and Ford to build two EV plants. [SK ON]

“These are proactive measures to establish a lean, agile workforce so that we can better navigate shifting EV market conditions,” said a spokesperson for SK On.

SK's attempt to cut its workforce comes amid its determination to turn a profit within the year to end 11 consecutive quarters of losses. It has not yet ended a year in the black since its establishment in October 2021.

Since July, it has decided to freeze the salaries of its executives including the CEO until it is profitable.

SK Innovation's scheduled merger with SK E&S is considered a major move to raise funds for the battery maker, which expects 7.5 trillion won ($5.6 billion) in capital expenditures this year alone.

It is committed to investing $11.4 billion in three new factories in Kentucky and Tennessee through a joint venture with Ford Motor.

SK On is also pushing hard for a three-round merger with SK Trading International, a crude oil trading subsidiary previously owned by SK Innovation, and SK Enterm, an energy logistics subsidiary.

SK On aims to go public by the end of 2026, though it previously said it was eying 2025 at the earliest.

BY SARAH CHEA [chea.sarah@joongang.co.kr]