"Successive Incidents Trigger Major Shake-up"... Telecom Industry on Edge Over '30% Executive Reduction'

"Now the Real Challenge Begins": Growing Sense of Crisis
Tension Mounts at KT After Direct Hit from Hacking
New CEO Appointment May Be Delayed Into Next Year
LG Uplus Also Faces Possible Organizational Restructuring

The aftermath of a series of hacking incidents this year is spreading to year-end personnel changes in the telecommunications industry, putting both KT and LG Uplus on edge as the year draws to a close. After SK Telecom implemented a drastic measure of reducing its executive ranks by 30% the previous day, a sense of crisis is spreading throughout the industry, with many saying, "This is the real beginning of a major restructuring."

KT, which was hit directly by the hacking incidents, is experiencing a subdued atmosphere. Security risks have persisted throughout the second half of the year, including unauthorized micro-payment incidents caused by illegal micro base stations (femtocells) and suspicions of concealing the hacking incidents. As a result, there has been ongoing speculation about possible personnel accountability. CEO Kim Youngsub took responsibility for the situation and decided not to seek another term, and the management accountability debate spread to the board of directors, eventually resulting in a change of board chair. KT is publicly recruiting candidates for its next CEO until November 16.

The heavy internal mood is expected to carry over into the new year. Typically, KT announces executive appointments at the end of November each year, but there is a tradition of minimizing personnel changes until a new leader is appointed, so this year's year-end appointments are likely to be postponed until the new year. Furthermore, KT's artificial intelligence (AI) business currently lacks a strong presence, so the organizational streamlining trend triggered by SK Telecom's large-scale downsizing is putting significant pressure on the company. An industry insider explained, "Telecommunications is already a mature market. Telecom companies are focusing on securing capacity for AI transformation, but since AI is not yet generating immediate revenue, the current trend is to conserve resources through cost-cutting rather than investment."

LG Uplus is not in the clear either. Although it is widely expected that there will be only limited personnel changes given that CEO Hong Beomsik has been in office for less than a year, the fact that the company is the only one among the three major telecoms whose hacking incident has not been fully clarified after reporting it to the Korea Internet & Security Agency (KISA) remains a burden. LG Uplus plans to share this year's business results and next year's strategic direction at a business briefing scheduled for early next week, and there is speculation that signals of partial organizational restructuring may emerge at that time.

The industry interprets SK Telecom's large-scale executive reduction as a "signal flare for restructuring in the telecommunications sector." Reducing the number of executives could lead to restructuring at lower organizational levels, and with both hacking risks and slowing growth, all three major telecom companies are entering a phase where it will be difficult to avoid "defensive personnel changes." The scale of personnel and organizational restructuring at the end of this year and the beginning of next year will be a crucial turning point, revealing whether each company, having faced successive hacking incidents, can overcome the crisis and shift organizational culture through structural improvement.