Kakao Corporation Undergoes Structural Reform... "Subsidiaries to Be Reduced to Around 80 by Year-End"

Kakao Corporation has significantly reduced the number of its group subsidiaries to double digits. On the 13th, CEO Jeong Shin-a announced in a letter to shareholders that the group currently has 99 subsidiaries and plans to further reduce this to around 80 by the end of the year.
■ Accelerating Subsidiary Reduction and Structural Reform
Governance efficiency has been a core initiative continuously pursued by CEO Jeong since she took charge of the CA Council's business operations in September 2023.
When Jeong Shin-a assumed the role of head of business operations, Kakao Corporation had 142 subsidiaries. By the time she was appointed CEO in March last year, this number had dropped to 132, and it currently stands at 99. This represents a 30% reduction in subsidiaries over two years. Kakao Corporation explained that this is part of a strategic direction to focus on key businesses in the AI era and to restore public trust.
Efforts to improve financial structure for a greater focus on core businesses are also underway. Kakao Corporation's consolidated operating profit for the second quarter of this year reached 185.9 billion KRW, a 39% increase year-on-year and the highest quarterly result ever. Despite the economic slowdown, robust growth in the Talk Business and improved profitability among subsidiaries have solidified the company’s financial base.
■ 'ChatGPT for Kakao' to Launch at the End of This Month
Kakao Corporation is accelerating efforts to create new growth momentum by integrating AI with KakaoTalk.
A prime example is 'ChatGPT for Kakao,' set to launch at the end of this month. Users will be able to access OpenAI’s ChatGPT directly from the KakaoTalk chat tab, allowing people of all ages to naturally utilize AI in their conversations.
The on-device AI service 'Kanana in KakaoTalk' is also slated for release. Utilizing the proprietary lightweight model 'Kanana Nano,' it operates solely on smartphones, prioritizing user privacy and ensuring safe service. Additionally, Kakao Corporation is rapidly expanding its AI ecosystem by connecting external services as agents through the Model Context Protocol (MCP) and the Agentic AI Platform, both unveiled last August.
To enhance shareholder value, Kakao Corporation has expanded its Total Shareholder Return (TSR)-linked compensation system, previously limited to key executives, to all executives starting this year. The company has also launched an AI education program for youth and plans to invest 50 billion KRW over the next five years in collaboration with the four major Institutes of Science and Technology in Korea (KAIST, POSTECH, GIST, DGIST) to nurture AI talent and support research and startups.
Furthermore, to help small business owners focus on their core operations, Kakao Corporation has established the Small Business Integrated Support Task Force (TF) to provide tailored, step-by-step support, thereby strengthening partnerships and mutual growth.
Jeong Shin-a stated, "Over the past year and a half, Kakao Corporation has swiftly restructured its group governance and implemented company-wide cost efficiency measures, establishing a financial structure that enables a focus on future growth. At this pivotal moment when the window for AI innovation has opened, Kakao Corporation will respond even more quickly, secure a leading position in the market, and do its utmost to enhance shareholder value through overwhelming growth in the near future." Jo Yoon-joo