South Korea’s Tech Giant Kakao Faces First Major Strike in 20 Years

Translation result

After the union representing employees at Kakao’s headquarters secured the right to strike, it announced plans to begin preparing for a strike next month. The move has raised concerns that core services—such as KakaoTalk messaging and Kakao Pay transfers—could face disruptions.

The Kakao branch of the National Chemical Fiber Food Industry Labor Union (the Crew Union, hereafter “the union”) said it would prepare for a strike next month after the Gyeonggi Provincial Labor Commission in Suwon suspended the second round of wage mediation for Kakao headquarters at 11 p.m. on the 27th.

Seung‑wook Seo, head of the Kakao branch, said, “We will keep channels for dialogue open, but we no longer believe that waiting alone will resolve this. Together with the Chemical Fiber Food Union, we will begin actively preparing for a June strike.”

Kakao’s management and the union have failed to narrow differences over this year’s pay increases, the structure of performance rewards, and reforms to evaluation and compensation systems. A central dispute is whether to tie performance bonuses to operating profit—a contention that surfaced in the recent Samsung Electronics labor dispute—and whether restricted stock units (RSUs) valued at 5,000,000 KRW (approximately $3,750) should count as performance pay.

After talks broke off earlier this month, the two sides met twice more at the provincial labor commission but were unable to close the gap. The commission ultimately decided to suspend mediation.

The union also criticized opaque performance-reward standards, controversies over long working hours, poor internal communication during organizational operations, and what it described as a lack of good-faith negotiating in labor talks.

◆Could Kakao headquarters face its first strike? Four affiliates also secured strike rights

If Kakao’s headquarters goes on strike, it would be the first such action in 20 years since the company’s founding in 2006 (counting its predecessor, iWilab). Last year, Kakao Mobility staged a partial strike, but the headquarters union has never directly led a work stoppage.

In addition to the headquarters, four affiliates—Kakao Pay, Kakao Enterprise, DK Techin, and XL Games—have also secured the right to strike after failing to reach wage agreements.

These companies run services that are among the group’s most critical. Kakao’s headquarters oversees KakaoTalk and KakaoMap. Kakao Pay handles remittances and payment services. Kakao Enterprise manages the cloud business, and DK Techin develops and operates the enterprise collaboration platform Kakao Work.

The union has not yet finalized the timing, format, or scope of any strike. Members will decide whether to stage a full strike, a partial walkout, a rotating strike, or to take actions such as rallies and picketing.

A coordinated general strike could raise concerns that major services, including KakaoTalk, might be affected.

◆Immediate suspension of KakaoTalk or transfers unlikely…longer strike could disrupt development

A short-term strike is unlikely to cause an immediate shutdown of KakaoTalk or Kakao Pay transfers. In manufacturing—such as at Samsung—halting production-line workers quickly reduces output and disrupts shipments. But IT platform services operate continuously on established servers and network infrastructure.

Platform services like KakaoTalk largely rely on automated systems and incident-response mechanisms. Nonunion staff and essential operations personnel can sustain basic service functions.

Because KakaoTalk functions as the country’s dominant messenger with broad social and economic impact, the company is expected to prioritize service stability. After mediation collapsed, Kakao said it would maintain an emergency response system to ensure continuity and minimize customer impact under any circumstances.

However, if a strike is prolonged, the impact could change. Extended action could hinder development and deployment of new features, slow post-incident responses, and delay broader service improvements.