Naver and Kakao... Growing Voices of Labor Unions in the IT Industry

On the 11th, employees belonging to the Naver Union held a press conference declaring collective action in front of Naver headquarters in Seongnam, Gyeonggi Province. / Seongnam - Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kang Nahum] Labor unions in the IT industry, which seemed far removed from labor issues due to high wages, differentiated welfare systems, and a flexible commuting culture, are raising the level of labor disputes by not hesitating to strike. The Naver union is taking collective action by raising the issue of wage discrimination among affiliates, while Kakao is stuck in an endless stalemate with its union over the issue of affiliate sales.

According to the portal industry on the 19th, the Naver branch of the Korean Confederation of Trade Unions' Chemical, Textile, and Food Industry Labor Union (Naver union) recently conducted a strike vote among five affiliates, and all five affiliate corporations approved the strike. The five affiliates are NTS (N Tech Service), NIT (N IT Service), Companions, Green Web Service, and Incomes, whose main tasks include Naver's management support, server management, and customer service.

These companies raised the issue of affiliate discrimination, saying their starting salaries are only about half of those at the headquarters. Last month, they conducted collective bargaining with Naver INS, a Naver subsidiary and the parent company of these companies, demanding improved treatment, but failed to reach an agreement and ultimately broke down.

The union is demanding ▲ a 10% annual salary increase ▲ 150,000 KRW monthly welfare points ▲ establishment of a dedicated organization to handle workplace harassment. They argue that improvements in treatment, such as in-house welfare, are difficult to resolve without Naver's involvement. These companies plan to take collective action in various forms, including high-level disputes such as strikes.

On the 11th, the Kakao Community Union Crew Union held a press conference regarding the sale of Kakao Mobility at Sangyeonjae, Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Kakao is also experiencing intensified conflicts with its union over the sale of its subsidiary Kakao Mobility. On the 18th, Kakao management and the union held an online meeting to attempt communication but only confirmed their differences. On that day, Bae Jaehyun, Kakao's Chief Investment Officer, said, "After the recent National Assembly audit, we considered removing 'Kakao' from Kakao Mobility's name and separating the affiliate," adding, "There is a harsh view toward companies with monopolistic positions on the Kakao messenger platform, so equity adjustments were inevitable."

In response, Seo Seungwook, head of the Kakao union branch, said, "Today's meeting made the problem clear," and added, "It is not because it is Kakao that the business was witch-hunted, but because the management lacked responsibility as a platform." He emphasized, "Changing the major shareholder is not the core issue; we need to discuss the social coexistence and growth of the business."

Starting with the wage conflict between Webzen labor and management earlier this year, collective actions by IT industry workers have become prominent this year, including at Naver and Kakao. Industry insiders point to a 'lack of communication' as the biggest cause of collective actions in the IT industry. Although IT companies such as game and portal companies claim to have a horizontal and free organizational culture that values creative ideas, the reality is different.

An industry official said, "Externally, it may appear as a horizontal organizational culture, but employees often do not know why and how certain decisions were made," adding, "Dissatisfaction accumulated due to asymmetrical labor-management relations has been expressed through collective actions."