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🇰🇷 South Korea /Economy & Trade

Kakao faces strike threat as union demands deemed 'unaffordable'

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources Ongoing story
  • Kakao faces its first-ever strike threat as the company deems the labor union's demands for performance-based compensation "realistically unaffordable."
  • The union is seeking a compensation package equivalent to 13-14% of last year's operating profit, plus restricted stock units, which Kakao argues would significantly burden its management.
  • Kakao has stated it is committed to service stability for users, while the union plans a strike demonstration in early July.

Kakao stands on the brink of its first-ever strike as the company declared the labor union's demands for performance-based compensation "realistically unaffordable." The tech giant issued a statement on May 29, asserting its "sincere engagement" in negotiations to enhance employee compensation stability.

However, Kakao argued that the total scale of the performance compensation sought by the "Crew Union" represents a substantial burden on the company's finances, especially when considered against its operating profit. "From the company's perspective, which must secure future growth engines and enhance shareholder value, this is an unaffordable burden," Kakao stated. The company emphasized that performance compensation should be balanced and sustainable, considering future investment capacity and shareholder value.

The total scale of the performance compensation sought by the Crew Union is at a level that poses a significant burden on the company's management when considered against operating profit.

— KakaoExplaining the company's stance on the union's compensation demands.

Negotiations between Kakao and the union over wages and performance compensation have stalled. Following the breakdown of talks on May 7, the union sought mediation from the Gyeonggi Regional Labor Relations Commission. Although mediation sessions were held on May 18 and 27, no agreement was reached.

From the company's perspective, which must secure future growth engines and enhance shareholder value, this is an unaffordable burden.

— KakaoJustifying the rejection of the union's performance compensation proposal.

The core disagreements revolve around proposals for performance bonuses equivalent to 13-14% of last year's operating profit and the inclusion of 5 million won worth of restricted stock units (RSUs) as part of the compensation. The union plans to hold a demonstration near Pangyo Station on July 10, signaling preparations for a full-scale strike.

Kakao assured users that it would prioritize service stability regardless of the situation. "Ensuring service stability without user inconvenience is a critical responsibility for Kakao," the company said, adding it would maintain robust response systems to ensure stable service operations.

Ensuring service stability without user inconvenience is a critical responsibility for Kakao.

— KakaoReassuring users about service continuity amidst the labor dispute.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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