(Yonhap)
Tensions over a potential strike are escalating at South Korea’s leading information technology (IT) company Kakao Corp., which would mark the first time since its inception.
Concerns are growing that Kakao could lose momentum as the internal conflict comes at a time when it needs to move fast amid the major transition toward artificial intelligence (AI).
According to sources from the IT industry, the Kakao chapter of the Korean Federation of Chemical and Textile, and Food Workers Unions, or the Kakao Union, announced on Thursday that its union members from Kakao, Kakao Pay Corp., Kakao Enterprise Corp., DK Techin Corp., and XL Games Inc. voted in favor of a strike in a strike authorization vote held during a large-scale rally on Wednesday, officially granting the union the legal right to engage in industrial action.
The Kakao union has demanded that about 15 percent of last year’s operating profit be allocated as bonuses, arguing that despite the company repeatedly posting record-high earnings, performance-based compensation has been concentrated on executives rather than employees.
It also claimed that it requested the company every year to clarify compensation criteria and establish a fair evaluation environment, but Kakao failed to respond sincerely, ultimately forcing workers to resort to collective action.
The issues of organizational restructuring and job insecurity have also weighed on the situation, sources said.
Kakao sold AXZ, the operator of portal service Daum, to Upstage just eight months after its establishment.
During the process, AXZ’s corporate valuation was adjusted downward and its inaugural chief stepped down, heightening anxiety among employees.
As the executive had demonstrated a strong managerial commitment from the time Daum was spun off as a company-in-company (CIC), criticism mounted that the move amounted to a deceptive exit strategy.
At Kakao Mobility Corp., in the meantime, controversy is escalating as a global private equity fund, one of its major shareholders, has secured grounds to exercise management control.
To resolve the situation, the union has presented a joint list of demands, including management reform and accountable management, job security and the establishment of a community safety net, fair performance-based compensation and profit sharing, and introduction of universal labor conditions and welfare systems.
(Kakao)
Kakao will resume mediation at the Gyeonggi Regional Labor Relations Commission under the Ministry of Employment and Labor on May 27, as both sides agreed on Monday to extend the mediation deadline, according to sources.
If negotiations break down again, the union could immediately move into a strike.
Even if a strike becomes reality, major Kakao services are unlikely to be suspended, sources said.
However, delays in executing the group’s AI strategy would be inevitable, as Kakao Enterprise is responsible for the AI cloud business while DK Techin oversees IT infrastructure operations.
Kakao said it will strive to reach an amicable agreement.
Experts, however, predict that the precedent set by Samsung Electronics Co. — which introduced a new compensation category called Special Management Performance Bonus separate from its existing excess profit performance bonus — is likely to increase pressure on Kakao.
“Demands for bonus payouts that ignore the characteristics of individual industries are expected to spread, potentially solidifying the practice of sharing operating profits as a new model for reward distribution,“ noted an industry insider. “Issues such as the absence of meritocracy principles, fairness controversies, weakening investment capacity for the future, and infringement on shareholder rights must be taken into consideration.”
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