Kakao is facing the prospect of its first company-wide strike after labor negotiations with its union collapsed on June 27, deepening a dispute over compensation structure and equity awards at one of South Korea’s largest tech firms as it pushes into artificial intelligence.
The breakdown came after a second round of mediation held at the Gyeonggi Regional Labor Relations Commission, where management and union representatives failed to narrow differences over key terms. The talks stretched for roughly eight hours, including a late-evening restart after a temporary recess, but ended without an agreement.
At the center of the dispute is how to structure performance-based pay, including whether restricted stock units (RSUs), valued at roughly $3,600 per employee, should be counted as part of compensation. The union has also demanded bonuses equivalent to 13%–14% of last year’s operating profit, while management and labor remain divided over how equity awards should be treated within the overall package.
With mediation formally terminated on June 27, the union has secured the legal right to strike under South Korean labor law. Union officials said a walkout is expected in July, though timing and scale have yet to be finalized.
The strike authorization vote had already passed prior to the second mediation session, meaning no additional membership approval is required for industrial action
The dispute raises the possibility of broader disruption across Kakao’s corporate group. Labor unions at affiliates including Kakao Enterprise, Kakao Pay, DK Techin and XL Games have already secured strike rights and approved walkout votes.
While Kakao Mobility carried out a partial strike in June last year, Kakao’s headquarters has never experienced a full-scale strike since its founding, underscoring the potential significance of any coordinated labor action.
The dispute comes as Kakao seeks to stabilize governance and accelerate artificial intelligence initiatives after a period of regulatory pressure and organizational restructuring.
A company spokesperson said Kakao would keep communication channels open despite the breakdown in negotiations, adding that it would continue efforts to reach an agreement with the union.
