Kakao Union Secures Right to Strike as CEO Emphasizes Unity

"While we have not yet sufficiently narrowed our differences, I will work harder to unite us as one Kakao through dialogue," Jeong Shin-a, CEO of Kakao, stated in a company bulletin amid a looming strike crisis following failed wage negotiations between management and the union. Jeong expressed regret to employees, known as "crew," for not quickly resolving various concerns and uncertainties. Kakao recently reported its highest quarterly performance to date and alleviated concerns over legal risks facing founder Kim Beom-soo, seemingly addressing internal issues. However, the conclusion of a rigorous management overhaul has given way to new internal dilemmas, including labor disputes and confusion over service strategies, putting Jeong's leadership to the test. The relationship between Kakao management and the union has deteriorated significantly. Disagreements over performance bonuses and the inclusion of restricted stock units (RSUs) in bonus calculations have persisted since the declaration of an emergency management strategy on May 27, leading to the collapse of the second round of mediation by the Gyeonggi Provincial Labor Relations Commission. The union claims that despite strong performance, management is prioritizing cost-cutting at the expense of employees. With the breakdown of negotiations, all five corporate unions within the Kakao community, including the headquarters union, have secured the legal right to strike, raising the possibility of a coordinated strike for the first time in the company's history. Additionally, the challenge of "revising service strategies" has emerged. Kakao's ambitious overhaul of the KakaoTalk service, aimed at accelerating stock recovery and developing AI monetization models, has faced severe backlash. The Chief Product Officer, Hong Min-taek, who led the overhaul, recently resigned, effectively marking the initiative as a failure. The stock price, which had recovered to the 70,000 won range before the overhaul, has now plummeted to the 40,000 won range, reflecting harsh market evaluations. The KakaoTalk overhaul faced significant user backlash for introducing overly commercial features into a private communication space used by 50 million users. Excessive advertising in chat rooms, the prominent placement of commerce and payment tabs, and changes to the user interface that compromised intuitiveness drew criticism. Users expressed frustration, stating that the platform had transformed from a convenient messaging service into a tool for aggressive monetization. In response, Jeong has taken decisive steps to address labor disputes while completely restructuring the product organization. The existing product teams will be decentralized, and the previously fragmented design teams will be integrated to enhance user experience consistency across services. A new "User First Task Force" will be established within the KakaoTalk organization to strengthen communication with users and improve service quality. This move is seen as an attempt to directly confront the ongoing user backlash and internal confusion following last year's overhaul. Industry experts view Kakao's actions as a declaration of a "return to square one." Jeong's emphasis on "one Kakao" is interpreted as a commitment to restoring essential trust as a public service rather than being solely focused on commercial pursuits, echoing the founding philosophy of Kim Beom-soo, who is currently stepping back from management due to health issues. Some voices suggest that Kim's return to management may be necessary to navigate the simultaneous crises. However, a Kakao representative stated, "Kim is not involved in management due to health issues. Currently, we are focused on establishing an emergency management system led by Jeong and resolving the ongoing labor disputes and stabilizing services."

* This article has been translated by AI.

Shin Hye An