NCsoft finalizes formation of two subsidiaries to expand into B2B sector

Industry

NCsoft finalizes formation of two subsidiaries to expand into B2B sector

Published: 14 Aug. 2024, 15:55

LEE JAE-LIM
lee.jaelim@joongang.co.kr

NCsoft's Research and Development (R&D) center in Pangyo, Gyeonggi [NCSOFT]

NCsoft finalized the decision to spin off two of its major divisions into separate subsidiaries in a bid to expand its expertise in the business-to-business (B2B) sector.

The agenda was passed during an extraordinary shareholder meeting on Wednesday at the game publisher’s research and development (R&D) center in Seongnam, Gyeonggi.

“We will utilize the new companies’ expertise in technological resources to develop into a B2B-oriented company,” said NCsoft’s co-CEO Park Byung-moo who chaired the shareholder meeting. “NCsoft will not only maintain its core competitiveness but will also focus on laying the foundation for sustained growth.”

The two newly-formed subsidiaries are NC QA Company and NC IDS Company, scheduled to be established on Oct. 1.

NC QA Company will focus on software quality assurance (QA) services, computer programming, system integration and management. The main business areas of NC IDS Company are software development and supply, as well as consultations on computer system integration.

About 360 workers from the company's headquarters will be relocated to the two subsidiaries.

NCsoft’s Chief Operating Officer Koo Hyun-bum stated that there are “no further plans for additional spin-offs” when inquired about the reasons for the recent divisions.

“NCsoft is more centralized compared to other companies in the industry, where divisions such as QA or software are often spun off,” Koo said. “We do not have plans for additional spin-offs beyond these [two].”

On the back of declining profitability, NCsoft has been tightening its belt on its work force, leading to growing uncertainty about workers’ employment stability. It aims to scale down the number of employees to the mid-4,000s this year from the prior 5,023 employees it had at the end of last year.

NCsoft executives held an internal meeting last month to reassure relocating employees that their wages and working environment will be the same as they were in the headquarters, promising that they would be rehired if the newly-formed subsidiaries close down or are sold off within three years of establishment. However, they declined to officialize their statement on paper when inquired by the company’s labor union.

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