Chile’s SQM Responds to Lithium Downturn with Largest Workforce Reduction in Years

Chilean mining company SQM, one of the world’s top lithium producers, is cutting about 5% of its workforce—roughly 400 jobs—after a sharp drop in lithium prices.

These layoffs affect both general workers and supervisors at SQM’s main sites in northern Chile and offices in Santiago. Lithium is a key material for making batteries used in electric vehicles and renewable energy storage.

In 2022, lithium prices soared and SQM expanded quickly, hiring thousands of new workers. The company’s workforce grew from just under 5,000 at the end of 2021 to more than 8,300 by the end of 2024.

But the market changed fast. Since late 2022, lithium prices have fallen by about 90%. This happened because many new lithium mines opened, especially in China, and because demand for electric vehicles did not grow as quickly as expected.

Battery makers also built up large stockpiles, so they are buying less lithium now. The price crash hit SQM’s profits hard. After making nearly $4 billion in profit during the 2022 boom, the company lost $404 million in 2024.

SQM’s Profit Bounce Masks Broader Industry Retrenchment

In early 2025, SQM returned to profit, earning $137.5 million in the first quarter, but the company expects tough times to continue. SQM is not alone. Other big lithium companies are also cutting jobs and delaying new projects.

The whole industry is moving from rapid growth to a more cautious approach, focusing on keeping costs low and staying profitable. Unions in Chile have criticized the layoffs, saying that workers should not pay the price for changes in the global market.

They plan to ask government officials for help and support for the affected families. These job cuts show how quickly global markets can change and how companies must adapt.

Lithium remains important for the future of electric vehicles and clean energy, but this story shows that even the strongest companies can face big challenges when prices fall.