The Naver Corporation headquarters (Image courtesy of Yonhap)
SEOUL, May 14 (Korea Bizwire) – As Naver weighs selling its stake in LINE Yahoo to SoftBank, employees at LINE’s Korean subsidiaries are grappling with uncertainty about their future.
Just six months after the merger of LINE and Yahoo Japan, Naver’s consideration of divesting its LINE Yahoo shares has sparked concerns about job security among workers. There is also resentment from Korean developers who spent 13 years nurturing the LINE messenger service, and are now facing the prospect of it becoming a Japanese company.
According to industry sources, several posts expressing worry over the potential sale of Naver’s LINE Yahoo stake have appeared on the internal online forums of LINE Plus and other Korean LINE Yahoo affiliates. One employee wrote, “If we work hard from now on, will it only help Japan? Should we assist Naver’s technical independence?”
Takeshi Idezawa, LINE Yahoo’s chief executive, said that the company would “gradually terminate the consignment relationship with Naver and pursue independence from the technical cooperation.”
Some have called for Shin Jung-ho, the former chief product officer who recently resigned from LINE Yahoo’s board, to provide a detailed explanation of the current situation. “Shin needs to hold a briefing session,” one employee posted. “He’s the only one who can give us a proper answer.” Referred to as the “father of LINE,” Shin’s exit has left LINE Yahoo’s board without any Korean representation.
A portion of the developers at LINE Plus are reportedly preparing to leave the company. Between 60% and 70% of LINE Plus employees are developers. An industry insider stated, “Like the phrase ‘NeKaRa’ (Naver, Kakao, LINE Plus) suggests, the industry highly regards the technical skills of LINE’s developers.” The source added, “They are anxious about LINE unexpectedly becoming a Japanese company.”
Alleviating job insecurity is paramount. The Korean units, including LINE Plus, LINE Financial, and LINE Next, collectively employ around 2,500 people. If LINE Yahoo transfers to SoftBank, the future direction and even the continued existence of these Korean entities become uncertain. LINE Plus plans to hold an explanatory session for all employees on May 14.
Some analysts view the merger of LINE and Yahoo Japan last October as the trigger for the current situation. Although a gradual merger was anticipated following their business integration in March 2021, the companies announced the merger without prior notice, raising suspicions.
A month later, a personal data breach occurred at LINE Yahoo involving Naver Cloud servers. Consequently, LINE Yahoo received an initial administrative guidance from Japan’s Ministry of Internal Affairs and Communications and initiated network separation from Naver. An industry official commented, “Since LINE shares a significant portion of its system with Naver, the network separation is a complicated process.”
However, the ministry took issue with LINE Yahoo’s report that complete network separation would take over two years, issuing additional administrative guidance. Subsequently, it was reported that the ministry pressured LINE Yahoo to reassess its equity relationship with Naver. LINE Yahoo, SoftBank, and Naver have acknowledged they are negotiating changes to their capital ties, including a potential stake sale.
Kevin Lee (kevinlee@koreabizwire.com)
