Kakao Labor-Management Mediation Fails... Countdown to First-Ever General Strike

No Agreement on Performance-Based Pay and RSUs

Headquarters Union Secures Right to Strike

The labor and management at Kakao, which had been in conflict over performance-based pay structures and other issues, ultimately failed to reach an agreement, resulting in the union securing the right to strike. With the Kakao union already preparing to launch a strike, Kakao now faces the first general strike crisis in its history.

On May 27, Kakao released a statement saying, "As a result of the second mediation session related to the 2026 wage negotiations held at the Gyeonggi Regional Labor Relations Commission, mediation has been suspended due to the failure to reach an agreement between labor and management."

Yonhap News Agency

On this day, starting at 3 p.m., labor and management at Kakao headquarters received a decision to suspend mediation during the second mediation session at the Gyeonggi Regional Labor Relations Commission. The two sides negotiated for nearly eight hours but were unable to narrow their differences over key issues. Previously, after the first mediation session held at the same commission on May 18, both parties had agreed to postpone the mediation deadline to this date.

Earlier, the Kakao branch of the National Chemical and Food Industry Workers’ Union (Kakao union) had already conducted a strike ballot, expressing its determination to stage a general strike, making the prospect of Kakao’s first general strike more likely. On May 20, the Kakao union held a rally at Pangyo Station Square in Seongnam, Gyeonggi Province, and announced that, in a strike vote conducted among union members, all five legal entities—Kakao, Kakao Pay, Kakao Enterprise, DK Techin, and XL Games—had voted in favor.

However, the breakdown in mediation does not immediately lead to a full-scale strike. There is still an internal process within the union to discuss the timing and methods of a strike. Since the Kakao union has not yet officially declared a general strike, the possibility of a dramatic agreement between labor and management remains open. Previously, when collective bargaining negotiations broke down in 2024 and the union applied for its first mediation at the commission, both sides reached a tentative agreement on wage and collective bargaining, including the reinstatement of one day of remote work per week, and an actual strike was avoided.

The main point of contention between Kakao labor and management is the compensation system, including performance-based pay and the scale of payouts. The union claims that while Kakao achieved record-high earnings last year and top executives received substantial performance-based bonuses, employees were offered disproportionately smaller bonuses. The union also cited the company’s unilateral decision-making process, excessive working hours, inadequate response to allegations of workplace harassment, and the forced consent to forensic investigations among employees as independent sources of conflict.

Labor and management are also at odds over whether to include Restricted Stock Units (RSUs) as part of performance-based pay. Since last year, Kakao has been providing RSUs worth KRW 5 million annually to all employees with one year of service, instead of stock options. Management insists that RSUs should be counted as part of performance-based pay, while the union maintains that RSUs are separate from bonuses.

A Kakao representative stated, "Even after the mediation process, we will keep the channel for dialogue with the union open and continue efforts to reach an agreement."

This content was produced with the assistance of AI translation services.