First Artificial Workforce Reduction Since SK Group Acquisition in 2020
"Proactive Domestic Fixed Cost Reduction to Establish Global Mass Production Line"
SK Nexilis, struggling with poor performance due to the electric vehicle 'Chasm' (a temporary demand stagnation before mass adoption), will begin offering voluntary retirement to employees with over five years of service starting this month. This marks the first workforce reduction since SK Group acquired the company in 2020.
On the 6th, SK Nexilis explained that the voluntary retirement is a "proactive measure to establish a global production system in the long term rather than focusing on short-term profitability."
SK Nexilis plans to operate its domestic Jeongeup plant as a 'Mother Line' (core production base) responsible for research and development (R&D) and next-generation premium product manufacturing, while establishing market-tailored mass production lines in Malaysia and Poland. SK Nexilis stated, "This is a domestic fixed cost reduction measure in preparation for this, and we will naturally prevent the outflow of key technology and production personnel."
During the Q1 earnings conference call on the 3rd, SKC said, "The biggest challenge right now is to transfer as much volume as possible from the Jeongeup plant, which has relatively lower cost competitiveness, to Malaysia to improve profitability," adding, "By around Q4, it will be possible to operate Malaysia Plant 1 at full capacity."
SK Nexilis reported Q1 sales of 91.6 billion KRW and an operating loss of 39.9 billion KRW this year, with a slight increase in operating loss compared to the previous quarter due to the increased fixed cost burden of the new Malaysian plant.
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