KT Koo Hyun-mo Administration Accelerates Organizational Restructuring for 'Internal Innovation and DigiCo Transformation'

2022 Organizational Restructuring and Executive Appointments Implemented
New Group Transformation Division Established
Support Given to President Yoon Kyung-rim
Cloud/IDC Business Promotion Office Also Established
Enhancing Corporate Value... Governance Restructuring
Network Division Head Replaced

[Asia Economy Reporter Cha Min-young] KT CEO Koo Hyun-mo, who will serve his final term next year, has carried out an organizational restructuring about a month earlier than last year, aiming to create a "turning point amid adverse conditions." While renewing the internally unsettled organization due to nationwide communication outages, he focused on completing the blueprint for KT's core vision under his leadership: the leap to a "digital platform company (DIGICO)."

According to industry sources on the 15th, the most notable aspect of the regular executive personnel changes and organizational restructuring announced by KT on the 12th was the establishment of the Group Transformation Division and the Cloud/Internet Data Center (IDC) Business Promotion Office.

Despite being implemented shortly after adverse events such as nationwide communication outages, the personnel changes did not show significant shifts. The structure was slightly adjusted from a CEO-led 4 offices-7 divisions-1 institute system to a 4 offices-8 divisions-1 institute-1 task force (TF) system, and most senior executives were retained except for some dismissals related to the Network Division. The regional headquarters' organization also maintained the existing framework.

Among these, the Group Transformation Division, newly established in September, was officially included in the organizational restructuring and took center stage. The Group Transformation Division is led by Yoon Kyung-rim, a "veteran KT man" who returned from Hyundai Motor Company and serves as president of the division. It oversees the Group Management Office and Group Partnership Office. This division is responsible for formulating and executing strategies to enhance corporate value, including KT Group companies' initial public offerings (IPOs) and investment attraction. Some functions were also transferred from the management planning division.

This reflects CEO Koo's strong intention to empower Director Yoon to enhance corporate value and accelerate the transition to DIGICO. Since his appointment at the end of 2019, CEO Koo has emphasized restructuring to reform corporate governance. Thanks to these governance reform efforts, KT's stock price recorded 31,550 KRW as of the 12th, up 33.7% compared to the same period last year.

With this organizational restructuring as a turning point, the reform of the group’s corporate governance is expected to accelerate further. Starting with K-Bank in 2023, various subsidiaries are anticipated to be considered for restructuring. In the content division, key hubs such as KT Studio Genie, the online video service (OTT) specialized corporation KT Season, and Storywiz have already been spun off, with 15 major subsidiaries remaining unlisted. Particularly, news emerged in September about plans to spin off the cloud and IDC business units, which are core to non-telecom B2B operations, raising expectations both inside and outside the company. Kakao and SK Square are also following similar steps of affiliate separation and listing. Conversely, it is also expected that less profitable entities may be spun off to hedge risks at the headquarters.

CEO Koo also reorganized the Network Division through this restructuring. Lee Cheol-gyu, former vice president and head of the Network Division, who was a wired network expert overseeing KT’s network division, stepped down from his position and is currently classified as "on standby" in a non-active role. However, future appointments in subsidiaries remain pending. Instead, Seo Chang-seok, head of the KT Network Innovation TF and former executive director, who took charge of accident recovery and acted as a crisis rescuer, was promoted to vice president and will now lead the Network Division.

Additionally, a Network Operation Innovation Office was newly established to utilize IT technologies and systems for network equipment operation, network management, and fault monitoring. It is explained that continuous inspections will be conducted through collaboration with the IT division and the Convergence Technology Institute to ensure smooth network operation.

An industry insider commented, "Typically, organizational restructuring and personnel changes reflect the CEO’s core message," adding, "The rise of Vice President Seo Chang-seok, who stabilized the Network Division, and efforts to enhance corporate value through spin-offs and IPOs of various affiliates stand out."

This content was produced with the assistance of AI translation services.