This Company Loses 200 Employees Through 'Hopeful Retirement'... High-Intensity Restructuring

Kakao Enterprise Cuts Workforce by 30%
Last Year's Operating Loss Widens Significantly to 140.6 Billion Won

About 200 employees of Kakao Enterprise, Kakao's business-to-business (B2B) specialized subsidiary, have left the company.

According to the information technology (IT) industry on the 2nd, Kakao Enterprise completed its voluntary retirement program conducted from July to September and entered the final stage of a high-intensity restructuring that reduces about 30% of the existing workforce (approximately 1,100 employees), including those who took voluntary retirement.

Lee Kyung-jin, the newly appointed CEO of Kakao Enterprise, is speaking at a media briefing held on May 16, where the business strategy and core competitiveness of Kakao i Cloud were introduced.
[Photo by Kakao Enterprise] [Image source=Yonhap News]

In this process, a significant number of Kakao Enterprise personnel moved to other companies within the Kakao group (community), including Kakao Brain, Kakao's artificial intelligence (AI) specialized subsidiary.

Kakao Enterprise was spun off in December 2019 from 'AI Lab,' Kakao's first in-house independent company (CIC). The company faced a crisis as its operating loss, which was 4.8 billion KRW in 2019, dramatically expanded to 140.6 billion KRW last year.

In response, former CEO Baek Sang-yeop resigned in May, and Lee Kyung-jin, then head of the cloud division (vice president), was appointed as the new CEO and president.

Kakao Enterprise announced plans to restructure the company into a cloud business-centered organization, reducing and transferring businesses unrelated to cloud services. Recently, it has attempted to change the atmosphere by renaming and rebranding its cloud services and introducing aggressive pricing policies.

A cloud industry insider said, "The cloud business requires significant initial investment, and there is a large gap in technological capabilities between companies," adding, "As investments freeze, the polarization of competitiveness may gradually intensify."