Pangyo, where several major software companies are based, is seen in this photo provided by the Seongnam city government.
SEOUL, Feb. 27 (Korea Bizwire) — Kakao Corp.’s recent decision to stop recruiting experienced developers is a reflection of the frozen IT industry amid the slumping economy.
The South Korean tech giant’s spending on wages surged from 911.9 billion won (US$691 million) in 2020 to 1.68 trillion won last year.
Due to the increased cost of labor and other operating costs, Kakao’s operating profit last year stood at 580.5 billion won, a decrease of 2.4 percent from 2021, marking Kakao’s first negative growth since 2018.
Internet portal giant Naver Corp.’s yearly operating profit also dropped for the first time in four years after labor costs jumped to 1.73 trillion won last year, up 12.4 percent from the previous year.
The game industry also cut back on hiring in an attempt to cut expenditures.
As investment worldwide continues a decline that started last year, ventures and startups are struggling to stay afloat.
The total amount of investment in startup in fourth-quarter stood at roughly 1.7 trillion won, down by more than a trillion won from the previous year, according to the Startup Alliance Korea.
IT professionals now out in the job market are struggling to find new jobs.
Last month, the number of job applications made through recruiting platform Wanted reached 166,883 submissions, an increase of 59.6 percent from January 2022.
Only 5,072 new job openings were posted on the platform last month, a drop of 27.6 percent.
Kevin Lee (kevinlee@koreabizwire.com)
