Kakao Union Opposes Spin-Off, Vows to Block Shareholder Vote

Kakao's labor union has formally declared its opposition to the company's planned spin-off, saying it will lobby shareholders to vote down the proposal at an extraordinary shareholder meeting.

The Kakao (035720) branch of the Korean Chemical, Textile and Food Workers' Union disclosed the plan at a press briefing on the 26th, held after a ceremony near Pangyo Station in Seongnam, Gyeonggi Province, to declare a KakaoBank (323410) strike resolution and joint bargaining against the split. Kakao announced on the 21st that it would divide itself into Kakao AI and Kakao X, with the two units focusing on artificial intelligence platform operations and on investment and subsidiary management, respectively. The company plans to complete the split on Jan. 1 after an extraordinary shareholder meeting on Dec. 17.

Suh Seung-wook, head of the Kakao union branch, said a credible reform plan addressing the company's existing problems should come before any discussion of a split, but the current plan contains no concrete measures. "We are not trying to block the split itself unconditionally," the union leader said. "We cannot accept a split without a diagnosis of the causes and remedies."

The union has set a goal of persuading major and minority shareholders to vote against the spin-off proposal at the Dec. 17 meeting. "If we gather opposing votes from shareholders other than the largest shareholder, who holds about 24%, and secure opposition from more than one-third of shares present, we can defeat the proposal," Suh said. "We plan to meet first with the National Pension Service, which holds a significant stake, and urge it to vote against."

The union had already criticized the split in a statement issued immediately after the company's announcement on the 21st. "Dividing the corporation alone cannot amount to fundamental reform without an assessment of repeated management failures and of a decision-making structure that takes no responsibility for them," the union said in the statement. "What matters more is how employment and working conditions for workers will be protected after the spin-off."

The union also demanded joint bargaining covering all affiliates. It delivered a set of joint demands to management on the same day, covering management reform, job security and an overhaul of the compensation system. The union said it would pursue joint bargaining in parallel, regardless of the timeline for the split.

Management said it would listen to employees. "Because this split is a significant change for employees, we plan to communicate continuously with the union and other members of the organization," a Kakao official said.