Kakao Faces Triple Hardships: Kamo Sale, Stock Price Drop, and Union Backlash

[Asia Economy Reporters Kang Nahum and Lee Seungjin] Namgung Hoon, CEO of Kakao, is facing his biggest challenge just three months after taking office. Inside the company, relations with the labor union have worsened due to discussions about selling Kakao Mobility to a private equity fund and the introduction of an attendance management system for remote work. Meanwhile, Kakao's stock price, which he pledged to raise to 150,000 won, has been hitting new lows daily, increasing both expectations and concerns about Namgung's leadership.

The Kakao branch of the National Chemical, Textile, and Food Industry Labor Union issued a statement on the 20th saying, "If the management, who promised the platform's social responsibility, tries to sell the company to a private equity fund, which is the furthest from that promise, no one will understand." They added, "Now is the time to think about and implement how to become a better platform, not to sell." Kakao Mobility CEO Ryu Geungseon held an internal meeting and said, "There have been discussions about selling the company, but nothing has been decided," and "If the sale is made under conditions that are difficult for us to accept, we will oppose it," attempting to calm the situation, but the atmosphere is spreading instead.

Solidarity movements among Kakao Mobility employees are also active. After news of the sale broke, union membership among employees rapidly increased, making Kakao Mobility the first Kakao subsidiary to form a majority labor union. Currently, the union has stated that it is willing to take collective action if a decision to sell Kakao Mobility is made.

The ‘Metaverse Work System,’ which is based on remote work, also included a mandatory clause requiring real-time connection to a voice channel (Discord) for attendance management. When employees criticized the system for having characteristics of a Panopticon (a circular prison designed for a few guards to monitor many prisoners), the mandatory clause was eventually changed to a recommendation, but complaints about "communication problems" remain. A Kakao union official said, "The biggest problem is that there was no communication with employees regarding subsidiary sales and work systems."

The internal situation is complicated, and the external situation is not good either. On the 21st, Kakao's stock price slightly rose to the 70,000 won range but had fallen to the 60,000 won range the previous day. This is the first time since the stock split in April last year. Kakao's subsidiary, Kakao Games, also released the highly anticipated title ‘Uma Musume Pretty Derby’ the day before, but due to concerns over worsening performance, its stock closed at 50,500 won, down 10.14% from the previous trading day, marking a new low.

An industry insider said, "Now that CEO Namgung has just passed three months in office, there are numerous internal and external issues piled up," adding, "Since he emphasized responsible management by saying he would only accept the minimum wage until the stock price reaches 150,000 won, it is time for CEO Namgung to demonstrate his unique leadership."