(Han Joo-hyung)

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SK Group has initiated a company-wide management reorganization, starting with an earlier-than-expected streamlining of SK ecoplant Co.’s management.

SK ecoplant unveiled its organizational restructuring plan on Thursday. Key changes to streamline the organization include the creation of a new high-tech business organization to respond to the growing semiconductor market and the separation of its energy business to focus on securing a leading position in the artificial intelligence (AI) data center market, but the core of SK ecoplant’s restructuring lie in its leadership renewal.

According to an SK Group official, the group‘s leadership previously instructed affiliates to prepare personnel restructuring plans aimed at reducing the number of executives by about 20 percent. SK ecoplant will see 17 executives, or 26 percent of its total 66, according to the company’s semi-annual report, depart, and only one person was promoted to an executive position.

SK Group traditionally conducts executive reshuffles in December, but with the early reshuffle at SK ecoplant, the group’s reshuffle could be brought forward, with observers expecting the upcoming CEO seminar, a three-day event starting at the end of October 2024, to determine the timing.

Following its reshuffle, SK ecoplant plans to reorganize its teams and implement personnel changes. An SK ecoplant official hinted that further personnel adjustments may be made at subsidiaries or other affiliates within the group.

Analysts suggest that this early reshuffle at SK ecoplant could be a catalyst for other affiliates. Early executive changes are also expected at SK innovation Co. and SK E&S Co., which are set to complete their merger on November 1st, 2024. A key SK Group official noted that personnel policies and plans have already been communicated to some senior executives, although the exact timing of the reshuffles is yet to be determined.

SK Group has been aggressively pursuing reforms since the beginning of 2024, citing a management crisis. Chey Chang-won, who chairs the SK Supex Council, ordered an evaluation of each affiliate‘s business shortly after taking the helm at the end of 2023. To address overlapping investments among affiliates, the group decided to restructure the group’s 219 affiliates during a management strategy meeting in June 2024, while it has also sold or merged various non-core assets throughout the year, including the merger of SK on Co. with SK trading international Co. and SK enterm Co. and the sale of SK specialty Co. to Hahn & Co.

“Some affiliates that have already undergone business restructuring will proceed with personnel and organizational changes before others, while the regular executive reshuffle is planned for December,” an SK Group official said.