[비즈한국] “The low-performer program underway at DK Techin is being repeated at Kakao Pay377300, and the excessive stock option exercises that occurred in the past at Kakao Pay are being repeated at Kakao Bank323410. The job insecurity that has been neglected for years at Kakao035720 Enterprise is now appearing identically at DK Techin, and the evaluation system currently implemented at Kakao is being applied to Kakao Pay.”
Seo Seung-wook, head of the Kakao union branch who led the first strike since the company's inception on the 10th, made it clear that the essence of this situation is not a simple conflict over performance bonuses. Branch Head Seo criticized the structural problems across the Kakao community, arguing that the costs incurred by the management's repeated mistakes and irresponsible management are being passed on solely to workers in the form of job insecurity and sacrifices.
The Kakao union held a four-hour partial strike from 10 a.m. to 3 p.m. that day, excluding lunch. According to the union, about 1,500 people across all corporate entities, including approximately 1,000 members from the headquarters, participated in the strike. About 800 members marched from Kakao Pangyo Agit in Seongnam, Gyeonggi Province, to the U-Space Plaza in Pangyo Techno Valley, where IT companies such as Nexon and NCSoft are concentrated, and held a resolution rally for about an hour.
Members from five entities—Kakao headquarters, Kakao Pay, Kakao Enterprise, DK Techin, and XL Games—participated in this strike. All of them have secured the right to collective action after wage agreement negotiations broke down.
“Bonuses Aren’t Everything”: The Essence of the Conflict Pointed Out by the Union
Regarding this strike, some have raised the view, “Aren’t they demanding performance bonuses even though performance is poor?” The union drew a line against such criticism. While it is true that the breakdown of negotiations over performance bonuses was the direct trigger, they argue that the distrust in management accumulated over several years and repeated issues of job insecurity lie in the background.
What the union particularly takes issue with is the similar conflict structure that repeats across subsidiaries. Branch Head Seo said, “The problems occurring throughout the Kakao community are not isolated incidents. A structure that demands sacrifices only from employees while avoiding management responsibility, and a structure that neglects job insecurity and monopolizes achievements while not sharing the responsibility for failure, is repeating itself.”
There was also mention of the KakaoTalk app reorganization and the recently departed former Kakao Chief Product Officer (CPO) Hong Min-taek. Recently, KakaoTalk's Android rating has recovered significantly to the 4-point range, and an interpretation is that the departure of former CPO Hong Min-taek lies in the background. Former CPO Hong, who left Kakao on the 31st of last month, was known to have led the large-scale KakaoTalk reorganization called the 'Big Bang Project' during his tenure. Kakao completely reorganized the 'Friends' tab into a feed format similar to Instagram in September last year, but faced strong backlash from users, forcing them to revert some features, which resulted in the app receiving 'one-star terror' ratings.
Branch Head Seo said, “If the departure of one executive is enough to change user ratings, we can see what the problem was,” and added, “The reason for the uncontrollable drop in stock prices was also not the strike, but the mistakes and errors of management, such as the block deal (after-hours large-scale trading) of Kakao Pay.” The Kakao Pay block deal incident is evaluated as an event that sparked 'moral hazard' controversy when 8 executives, including former CEO Ryu Young-jun, sold all their shares just one month after the company's listing on the securities market in 2021.
“Other Subsidiaries Suffering from the Same Problems”
Subsidiary unions raised their voices of criticism regarding job insecurity and management responsibility. A Kakao Enterprise union official claimed, “The company has been suffering from job insecurity for nearly three years,” adding, “The vision and roadmap for the cloud business are still unclear.” Kakao Enterprise, which specializes in AI and cloud-based B2B services, carried out a large-scale business reorganization by withdrawing from non-cloud-related businesses in 2023, but personnel movement and job insecurity have continued during this process. The official criticized, “The CEO must apologize and take responsibility for not keeping the promise of returning to the search division and passing the responsibility onto Kakao Enterprise.”
The issue of the portal site 'Daum' being spun off and transferred from a Kakao in-house independent company (CIC) to a newly established entity 'AXZ' last year, and subsequently sold, was also discussed. Branch Head Seo asked, “As soon as the AXZ sale proceeded, the CEO irresponsibly left the company, and the Kakao CPO also left without a word or any reflection,” adding, “Are these stories about separate companies?”
At DK Techin, a 100% subsidiary for Kakao's IT development, concerns about workforce reduction have emerged as a core issue. Internal documents containing a target of reducing about 121 people, or 16% of the total workforce, have been leaked, spreading anxiety among members. A DK Techin union official pointed out, “Since the dismissal of CEO Lee Won-ju at the end of April, a vacuum has continued where there is no actual decision-maker,” and added, “The CEO representative is an official from Kakao's management planning, meaning important decisions are virtually under the control of Kakao headquarters, yet wages are stuck in the 2% range and there are no employment countermeasures.”
XL Games, a granddaughter company of Kakao, is facing a more direct phase of restructuring. Due to a sharp decline in sales of its flagship game 'ArcheAge War,' XL Games recorded an operating loss of 10.1 billion KRW in the first quarter of this year alone and has urgently borrowed funds from Kakao Games293490. Voluntary retirement has already been carried out with a target of reducing more than 20% of the workforce, with over 80 people leaving in the first round, and the situation is now leading to discussions on layoff procedures. Branch Head Seo said, “The layoffs at XL Games will be repeated at other entities. This is not a prophecy; it's because the company thinks there is no problem in managing in this way.”
RSU 'Detonator'... “Changing Numbers on the Books is Deception”
The direct trigger for this strike is the disagreement between labor and management over the scale and payment method of performance compensation. The union is demanding that 10% of operating profit be used as the source for performance bonuses, separate from Restricted Stock Units (RSUs) worth 5 million KRW. On the other hand, it is reported that the company proposed a total scale including RSUs at the 10% level of operating profit.
The union argues that since RSUs were already promised as a long-term compensation method, including them in the performance bonus pool is merely reclassifying existing compensation. A union official stated, “We already conceded on the long-term compensation program, but the company is trying to include RSUs in the performance bonus pool,” adding, “Long-term compensation is long-term compensation, and performance compensation is performance compensation. Changing the numbers on the books to make it look like performance compensation has increased is deception.”
The issue of equity in compensation methods was also raised. The structure is such that executives can immediately cash out stock options, while employees receive RSUs that must go through a restricted selling period. According to the union, even while wage negotiations were underway, Kakao Bank executives exercised their holdings of stock options, leaving a profit of about 9 billion KRW. The union's position is not that management compensation should be unconditionally cut, but that socially excessive parts should be improved and a message of responsible management should be sent to shareholders.
'Log-off Day' Planned for the 29th, Negotiation Schedule Undecided
The gap between labor and management is not narrowing. In a briefing immediately after the resolution rally, Branch Head Seo revealed, “We had one additional negotiation session with Kakao headquarters on the 8th after the Labor Relations Commission mediation failed, but there was no progress significant enough to reach an agreement.” He reaffirmed that the core barrier is still whether or not to include RSUs, stating, “What the union is demanding is not future compensation, but current compensation.”
Accordingly, the union plans to push for a 'Log-off Day' on the 29th, when all members will use annual or vacation leave. Without a separate rally, they plan to collectively log out of work systems and collaboration tools for one day, coordinating the timing for each entity. Park Seong-ui, senior deputy branch head of the Kakao union, stated, “We are preparing with the goal of full participation by all members.”
The union emphasized that the demand for the resignation of management is not a slogan against specific individuals, but a call for responsible management. Branch Head Seo stressed, “Improvements can only come when the cause is identified and responsibility is assigned properly when a problem occurs.” He added, “The conflict repeating across the Kakao community is ultimately rooted in a management structure that does not take responsibility,” and that “long-term measures, including labor-management-government dialogue, are needed.”
With this strike as a catalyst, the conflict between labor and management at Kakao is expanding beyond simple wage negotiations into a structural debate over the group's overall management responsibility structure and compensation system. With no additional negotiation schedule set, attention is focused on whether labor and management can find common ground about three weeks before 'Log-off Day'.