Kakao's wage talks with its union broke down without a final agreement, and the union has warned it will strike. Kakao CEO Jeong Shina (정신아) apologised to employees and set out a plan to restructure the organisation.

In an internal bulletin board notice on Wednesday morning, Jeong said, "I am sincerely sorry that we have not been able to quickly resolve various concerns and uncertainties." She added, "I take it seriously that the talks are taking longer and that your wait is also getting longer." The comments followed a second round of mediation in wage talks that continued until late Tuesday night but failed to reach a final agreement.

Labour and management held about 8 hours of negotiations on Tuesday but failed to narrow their differences. The two sides were reported to disagree over a plan to pay 13 to 14 percent of last year's operating profit as a performance bonus and whether to include restricted stock units worth 5 million won in the performance bonus. The Kakao union secured the legal right to take industrial action after the Gyeonggi Provincial Labor Relations Commission decided to suspend mediation on Tuesday.

The union has warned it will begin a strike in June. It was also reported to have notified the Bundang police station of a rally and march involving about 1,200 union members around Pangyo Station and near U-Space on June 10.

Jeong said the two sides had yet to narrow their differences sufficiently. She said she would work harder to listen more to each other's voices, resolve differences through dialogue, and unite again as one Kakao.

In the same notice, Jeong also set out the restructuring plan. She said it was a time when Kakao needed an operating structure that could more effectively create user-centric services. Kakao will split its existing product organisation into KakaoTalk and business units, and integrate its design organisation, which had been dispersed, to raise expertise in each area and improve collaboration. Within the KakaoTalk organisation, it will create a "User First" task force to strengthen communication with users and improve service completeness. Detailed restructuring will be carried out gradually.

Separately, Hong Min-taek (홍민택), the chief product officer who has led Kakao's product organisation, was reported to have already submitted his resignation and plans to leave the company in early June. Hong has led overall products including the KakaoTalk revamp, and attention is focused on whether the restructuring will lead to a reorganisation of the product operating structure.