The ongoing labor dispute between Kakao and its employees has escalated, putting the company at risk of its first headquarters strike since its founding. The Kakao Union, part of the Korean Chemical Fiber Food Industry Workers' Union, has approved a strike vote, increasing pressure on the company as the second mediation session with the Gyeonggi Provincial Labor Relations Commission is set for May 27.
According to the IT industry on May 21, Kakao's headquarters, along with Kakao Pay, Kakao Entertainment, DK Tech, and XL Games, held a "2026 Collective Bargaining Victory Rally" at Seongnam's Pangyo Station on May 20, where members voted in favor of a strike.
The two sides extended the mediation period until May 27 after failing to reach an agreement during the first mediation session on May 18. If the second mediation also fails, the Kakao headquarters union will secure the right to strike. Some subsidiary unions have already obtained strike rights due to a decision to halt mediation.
The union and management remain at an impasse over performance compensation and job security. The union argues that employees have significantly contributed to Kakao's profitability and deserve fair distribution of rewards. Meanwhile, the company is cautious about expanding compensation due to uncertainties surrounding increased investments in artificial intelligence (AI) and business restructuring.
During the rally, the Kakao Union presented joint demands including management reform and accountability, job security and community safety nets, fair performance rewards and profit distribution, and the establishment of universal labor conditions and welfare systems.
Industry observers note that the current actions of the Kakao Union carry more weight than last year's events. Last year, the Kakao Mobility Union announced a phased strike after wage negotiations broke down, conducting a two-hour partial strike, followed by discussions of a four-hour partial strike and a full strike. However, no further actions materialized during the negotiations.
This time, the involvement of Kakao's headquarters and major subsidiaries is seen as having greater scale and impact. The headquarters oversees key operations, including KakaoTalk, advertising, commerce, and AI strategies, drawing significant industry attention. Should a strike occur, it could affect the stability of major services like KakaoTalk and the timeline for AI project developments.
Unlike manufacturing, the likelihood of an immediate service disruption due to a strike at an IT company like Kakao is considered low. The platform operates on automated server systems and a continuous response organization, making it unlikely that a short-term strike would immediately paralyze services like KakaoTalk.
However, prolonged labor disputes could hinder the development of new services and project timelines. Kakao is currently transitioning KakaoTalk from a simple messaging app to an AI agent platform that integrates conversation, search, recommendations, and payments. A prolonged gap in development personnel could delay the rollout of new AI features and service enhancements.
Similarly, while the likelihood of a strike halting Kakao Pay's payment and remittance services is low, it could create pressures regarding operational stability and external trust management. Kakao Enterprise and DK Tech, which handle cloud and AI-based B2B operations and internal development and support, respectively, may also face impacts on technical support, maintenance, and new project implementations if the strike extends.
Kakao has stated that it is focused on labor negotiations. A company representative said, "Since both sides agreed to extend the mediation period on May 18, we will continue to strive for a smooth agreement during the remaining time."
* This article has been translated by AI.
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