Kakao Corp. moved closer to its first headquarters strike on May 20 local time after unionized workers across five affiliated entities voted in favor of industrial action, deepening a dispute over compensation that threatens to disrupt the company’s broader artificial-intelligence strategy.
The South Korean internet giant now faces a critical round of mediation talks scheduled for May 27 local time. Failure to reach an agreement could trigger a wider group-wide strike spanning key subsidiaries tied to Kakao’s platform, fintech and gaming businesses.
The union representing Kakao employees said workers at Kakao headquarters, Kakao Pay, Kakao Enterprise, DK Techin and XL Games all approved strike action.
Although Kakao headquarters remains under mediation with regional labor authorities, employees proceeded with a strike authorization vote ahead of the negotiations.
Kakao Mobility staged a partial strike for one week last year, but Kakao headquarters itself has never experienced a strike since the company’s founding.
Union officials said they are weighing multiple forms of collective action, including full strikes, work slowdowns and work-to-rule campaigns.
At the center of the dispute is Kakao’s performance-based compensation structure. Industry officials said labor representatives had proposed bonus payouts equivalent to 13% to 15% of the company’s operating profit from last year, though union leaders described those figures as one of several ideas discussed during negotiations rather than a formal demand.
Speaking at a labor rally near Pangyo Station on May 20 local time, union officials accused Kakao management of concentrating rewards among senior executives while reducing incentive pools for ordinary employees.
The union claimed executives received short-term bonuses worth as much as 150% of annual compensation even as employee performance payouts were scaled back. It also criticized the company over compensation arrangements involving former executives and advisory appointments.
Kakao said management and labor representatives agreed on May 18 local time to extend the mediation process and that the company would continue efforts to secure a negotiated settlement.
The dispute comes as South Korea’s technology sector accelerates investment in artificial intelligence while attempting to restore profitability after years of aggressive expansion.
Kakao has identified this year as a turning point for its AI business and has been integrating its proprietary AI model, Kanana, into messaging, commerce, content and financial services platforms.
Industry analysts warned that collective action involving software engineers and platform operators could delay AI product rollouts, disrupt service upgrades and complicate the company’s commercialization plans at a time when global competition in AI is intensifying.
The labor standoff is also being closely watched across South Korea’s broader technology industry, where competition for AI talent and disputes over performance-based compensation are becoming increasingly common.
Naver Corp., Kakao’s largest domestic rival, recently reached a wage agreement with employees after roughly three weeks of concentrated negotiations, approving a 5.3% pay increase for this year.
Naver has said it plans to accelerate monetization of AI services beginning in the third quarter, and industry officials said the relatively swift agreement reduced uncertainty surrounding the company’s AI expansion plans.
Investors and executives across the sector are increasingly concerned that prolonged labor disputes could undermine confidence and complicate decision-making as platform companies face mounting pressure to deliver returns on rising AI investment.
