[Reporter’s Notebook] Kakao Labor and Management Turn Their Backs, Risk Losing Their Last Chance

A Critical Moment for Transforming into an AI Platform

Kakao is facing the prospect of its first-ever strike since its founding, after wage negotiations between labor and management broke down. While the wage conflict, including the performance-based compensation system, is the apparent cause, many believe the deeper root lies in the breakdown of trust between Kakao’s management and its labor union. The union claims that management has made unilateral decisions and shown an insincere attitude during negotiations, all while receiving large-scale compensation compared to regular employees, resulting in a highly unbalanced compensation structure.

The issue is further compounded by the challenging internal and external circumstances Kakao is facing. Despite the onset of the full-fledged artificial intelligence (AI) era, Kakao has long been criticized for lagging behind competitors in AI performance and for focusing its business on domestic platforms, which are considered to have limited market potential and weak future growth engines. For these reasons, when the KOSPI surpassed the 8,000 mark, Kakao’s stock failed to ride the wave.

Management has recognized these problems and has been striving for reform. CEO Shin Seong-ah worked to improve management efficiency by reorganizing non-core subsidiaries, which resulted in the company achieving its “best performance since founding” last year. Through the sale of affiliates and liquidation of Dunamu shares, Kakao also secured ample capital for new investments, and the strategy to evolve KakaoTalk into an agentic AI platform was being pursued step by step.

However, in the process, the company failed to pay close attention to employees’ dissatisfaction. Issues such as excessive working hours, inadequate responses to workplace bullying allegations, and controversies surrounding certain executives’ “stock option profiteering” further fueled internal distrust.

With conflict between labor and management now escalating, Kakao finds itself at a crucial juncture to transform from a messenger platform—where it has been stuck for over a decade—into an AI platform. If the union pushes ahead with a strike and the development of core AI services is halted even briefly, the gap with competitors could become irreversibly wide. Kakao’s very survival is at stake.

Restoring trust between labor and management is imperative. If both sides continue to distrust each other, situations like the current near-strike could easily recur. Kakao must listen attentively to employees' grievances and demonstrate a sincere attitude in negotiations. The union, for its part, should recognize the gravity of both internal and external circumstances and refrain from making excessive demands.

After negotiations broke down, CEO Shin wrote on the company bulletin board, “Ultimately, we are all crew members working together within Kakao, moving in the same direction.” Kakao’s corporate culture refers to its employees as “crew” to promote horizontal communication and a sense of community. Whether the ship carrying these crew members will move forward to its destination or come to a halt and drift will depend on their willingness to restore trust.

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