Kakao Enterprise Cold Wind... Establishment of Cloud and Search CIC

Kyungjin Lee, CEO of Kakao Enterprise

Kakao Enterprise has drawn the sword of reform. The cloud and search business divisions will be split into CICs (Company-In-Company). While empowering the business divisions expected to be profitable, existing businesses are likely to undergo intensive restructuring.

Kakao Enterprise recently decided to convert the cloud and search business units into CICs. A CIC refers to a small company affiliated with Kakao Enterprise. It is an organization that can quickly and independently make decisions on overall management tasks necessary for organizational operations such as HR and finance.

Along with the transition to the CIC system for the cloud and search divisions, Kakao Enterprise integrated and reorganized its organizational structure by work function. During this organizational restructuring process, a significant number of executives left the company. The management, including the CEO, voluntarily reduced their salaries.

Previously, Kakao Enterprise had announced a business restructuring centered on the cloud. On the 16th, Lee Kyung-jin, the new CEO of Kakao Enterprise, held a press briefing and said, "We plan to reorganize the organization by cloudifying existing business divisions to meet profitability."

Kakao Enterprise’s performance had been continuously deteriorating, making countermeasures urgent. Last year, it recorded an operating loss of 140.6 billion KRW, with the deficit increasing by about 50 billion KRW compared to the previous year. It also failed to attract additional investments that had been underway since the second half of last year.

At the press briefing, CEO Lee explained that there was no fixed plan for business sales or withdrawal, but the prevailing view was that non-core businesses excluding the cloud would be withdrawn or sold off, and employees would be reassigned to the headquarters. With the cloud and search business divisions split into CICs, other businesses are expected to undergo intensive restructuring.

A Kakao Enterprise official said, "While carrying out ongoing projects without disruption, we will promote service solidification through management reform and efficiency improvements," adding, "We will use this as an opportunity to establish a foundation for visible profitability improvement and growth."

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