Kakao Enterprise sheds 200 employees in just three months

Some 200 Kakao Enterprise employees have left the company in the past three months as part of its restructuring plans initiated in July.

Kakao Enterprise, a Kakao subsidiary that offers AI-based cloud services to companies, is in the process of concluding the company’s massive reshuffle. Approximately 30 percent of its 1,100 employees were either let go or redistributed, according to local media reports.

The 200 employees left the company as part of the company's voluntary retirement program and the rest were relocated to other Kakao subsidiaries such as Kakao Brain.

A Kakao Enterprise spokesperson would not confirm the exact figure.

The reshuffle has been part of the company’s move to downsize company management to cut business costs and to focus primarily on its cloud services.

Kakao Enterprise started off as a “company in company”, or CIC labeled “AI Lab” in May 2019.

CIC refers to a company structure in which a certain business unit runs its management independently within the mother company, much like a corporate venture.

AI Lab officially became a Kakao subsidiary under the new company name Kakao Enterprise in December 2019.

Since then, Kakao Enterprise failed to post an operating profit. The company’s operating loss rose to 140.5 billion won ($103 million) last year compared to 2021’s 90.1 billion. Revenue increased 71 percent on year to 163.3 billion won in 2022.

Kakao Enterprise has been coming up with a variety of new business strategies to overcome its challenges.

In May, the company appointed Lee Kyung-jin, former head of the company’s cloud division, as its new CEO.

It also separated its primary business division in cloud and search engines as two separate CICs during the same month.

In September, Kakao Enterprise changed the logo of its cloud service from “Kakao i Cloud” to “Kakao Cloud” to emphasize the service’s utility as a cloud platform in the business-to-business realm.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]