Employment Anxiety Spreads After Voluntary Retirement at Some Affiliates
"Due to Reckless Business Expansion... Management Responsibility Comes First"
The Kakao labor union is preparing to take collective action. Internal dissatisfaction has risen recently over the voluntary retirement programs conducted by its affiliates. The union argues that the management is shifting the responsibility onto employees despite the financial difficulties being caused by the management's reckless business expansion.
The Kakao branch of the Korean Confederation of Trade Unions' National Chemical, Textile, and Food Industry Labor Union (Crew Union) plans to announce its collective action plan early this week through a statement. The union has held consecutive briefing sessions with affiliates such as Kakao Enterprise until recently. As a result, a consensus was formed that action opposing voluntary retirement is necessary.
The spark for the union's movement is the voluntary retirement program. Among the affiliates, Kakao Enterprise, which has the largest deficit, announced its voluntary retirement plan on the 17th and is currently accepting applicants. It plans to provide severance pay, up to six months of base salary, and a support fund of 2 million KRW. Kakao Entertainment conducted a de facto voluntary retirement program last month targeting employees with over 10 years of experience. Through the career transition program 'Next Chapter,' it offered severance pay, up to 15 months of base salary, and a support fund of 5 million KRW.
Within Kakao, voices opposing the voluntary retirement program are growing louder. Critics argue that proceeding with restructuring without holding management accountable or revising the business model is not a solution. There is also significant dissatisfaction that the voluntary retirement conditions do not meet employees' expectations.
Concerns about restructuring are spreading throughout the Kakao community. This is because the situation is no different in other affiliates. Major affiliates such as Kakao Style (52 billion KRW deficit), Kakao Brain (30.1 billion KRW deficit), and Kakao Healthcare (8.5 billion KRW deficit) are all running deficits. Before their business models have been established, the economic downturn has dried up external funding sources, forcing them to rely on support from the headquarters. Bae Jae-hyun, Kakao's Chief Investment Officer, warned during the first-quarter earnings announcement that "businesses with low competitiveness will be wound down."
Contrary to the previous policy of no restructuring, Kakao Enterprise suddenly announced the implementation of voluntary retirement, increasing anxiety among other affiliates. There are also concerns that the workload for the remaining staff will increase. Seo Seung-wook, chairman of the Kakao labor union, emphasized, "The failure of reckless business expansion is due to insufficient management oversight and the overly easy approval of business expansion. The management must first apologize and take responsibility for this."
The IT industry is closely watching Kakao. This is because not only foreign IT companies and startups but also large platform companies have begun voluntary retirement programs. Until now, the industry has conducted restructuring disguised as organizational reshuffles, such as eliminating certain business units or reassigning employees to unrelated roles. An industry insider said, "The signal for voluntary retirement has begun even in platform companies that were previously far from layoffs."
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