diff --git a/.changeset/cuddly-cooks-grin.md b/.changeset/cuddly-cooks-grin.md
new file mode 100644
index 000000000..6a3b94581
--- /dev/null
+++ b/.changeset/cuddly-cooks-grin.md
@@ -0,0 +1,7 @@
+---
+'sku': patch
+---
+
+Disable `babel-loader` cache compression
+
+`sku` applications tend to transpile many modules and upload all cache files as a single compressed file. This makes compressing each individual cache file superfluous, so this feature has been disabled.
diff --git a/packages/sku/config/babel/babelConfig.js b/packages/sku/config/babel/babelConfig.js
index ce4ec39f9..0493aeafb 100644
--- a/packages/sku/config/babel/babelConfig.js
+++ b/packages/sku/config/babel/babelConfig.js
@@ -101,6 +101,7 @@ module.exports = ({
     ...(!isJest
       ? {
           cacheDirectory: true,
+          cacheCompression: false,
         }
       : {}),
     presets,
diff --git a/packages/sku/config/webpack/webpack.config.js b/packages/sku/config/webpack/webpack.config.js
index 6040877d5..7bc691057 100644
--- a/packages/sku/config/webpack/webpack.config.js
+++ b/packages/sku/config/webpack/webpack.config.js
@@ -177,6 +177,7 @@ const makeWebpackConfig = ({
                       options: {
                         babelrc: false,
                         cacheDirectory: true,
+                        cacheCompression: false,
                         presets: [
                           [
                             require.resolve('@babel/preset-env'),
diff --git a/packages/sku/config/webpack/webpack.config.ssr.js b/packages/sku/config/webpack/webpack.config.ssr.js
index 6a6beafe1..65d533593 100644
--- a/packages/sku/config/webpack/webpack.config.ssr.js
+++ b/packages/sku/config/webpack/webpack.config.ssr.js
@@ -140,6 +140,7 @@ const makeWebpackConfig = ({
                       options: {
                         babelrc: false,
                         cacheDirectory: true,
+                        cacheCompression: false,
                         presets: [
                           [
                             require.resolve('@babel/preset-env'),