Kakao union holds 1st-ever walkout over bonus pay dispute

Members of Kakao's labor union hold banners during a sit-in protest near the mobile platform group's Pangyo office in Seongnam, Gyeonggi Province, Wednesday. Yonhap

Tech giant Kakao’s labor union staged its first-ever walkout on Wednesday, escalating a dispute with management over performance-based compensation after labor and management failed to reach an agreement.

It is rare for a labor union in the IT industry to launch a strike. The industry is closely watching how the labor dispute at Kakao develops, as it could affect bonus talks in other companies across the sector.

The union staged a partial strike from 10 a.m. to 3 p.m. on Wednesday. The walkout included employees from Kakao and its affiliates — Kakao Pay, Kakao Enterprise, DK Techin and XL Games. According to the union, about 1,500 workers across the five entities, including around 1,000 employees from Kakao itself, took part in the action.

About 800 union members also held a sit-in rally in front of Kakao’s Pangyo office in Seongnam, Gyeonggi Province, followed by an 800-meter march from Pangyo Station on the Shinbundang Line.

“Management failures resulted from management decisions, so why should workers bear the burden through restructuring and layoffs?” a union official said during the rally. “This is not simply about a little more compensation money.”

The dispute centers on the structure and amount of employee compensation. The union has demanded that restricted stock units (RSUs) worth 5 million won ($3,280) per employee be granted separately from annual performance bonuses.

Management, however, reportedly proposed a compensation package that includes RSUs as part of the overall performance-reward pool, arguing that the union’s demands would impose an excessive burden on the company’s finances.

The disagreement reflects broader tensions over profit-sharing. The union has pushed for performance bonuses equivalent to roughly 13 to 15 percent of operating profit, while the company has suggested a lower level of around 10.5 percent.

Union leaders argue that the company’s current compensation framework inadequately reflects employee contributions. They also raised broader concerns over job security and management accountability amid restructuring efforts across Kakao affiliates.

Members of the Kakao labor union hold umbrellas and signs during a protest near the mobile platform group's Pangyo office in Seongnam, Gyeonggi Province, Wednesday. Yonhap

The union's demand resembles that of the unions at Samsung Electronics, which threatened to go on strike last month unless management provided performance-based bonuses equivalent to 15 percent of the company’s operating profits and removed payout caps. Their demand came as the company's profits for the first quarter were much larger than expected, backed by high chip demand amid the artificial intelligence (AI) boom.

While the dispute at Samsung ended after management and the unions agreed on bonuses equivalent to 10.5 percent of operating profit and the removal of the caps, similar debates over profit-sharing have spread to other profitable industries.

Wednesday's walkout at Kakao may escalate into further disputes, with the union planning another action. It said it will stage a log-off day on June 29, encouraging all members to take leave on the day in what amounts to a de facto full-day strike.

The union said future actions will depend on progress in negotiations, but warned that pressure on management will increase if the compensation dispute remains unresolved.

Despite the strike, Kakao’s major services, including its flagship messenger KakaoTalk and Kakao Map, continued operating normally. Unlike manufacturing companies, where work stoppages can immediately disrupt production lines, platform operators typically face less immediate operational risk from short-term labor actions.

However, the Ministry of Science and ICT took precautionary measures ahead of the strike, teaming up with Kakao to assess service continuity plans and set up coordination procedures to respond to potential service outages or security risks.