Kakao Entertainment, the South Korean tech giant that owns mobile comics portal Tapas is shutting the Korean office of Tapas Entertainment down, Tech Crunch is reporting.
In addition, The Beat has learned that the US office of Tapas had a round of layoffs last month, with cuts to several departments there and at Radish, another division of Kakao’s US content arm. VP of Content Michael Son and several other editorial personnel remain at the company.
All these moves are seen as part of consolidating Kakao’s content production arm, as well as a reaction to the volatile economic market. Kakao told Tech Crunch that the plan is to restructure around the North American unit, with layoffs in the Korean unit.
“Tapas Entertainment is streamlining operations to respond flexibly [and quickly] in the North American market in response to the global economic downturn,” a Kakao Entertainment spokesperson told TechCrunch. “Tapas Korea has been in the service of operation and marketing of Tapas Entertainment that is headquartered in the U.S.”
The company did not provide the total number of employees at Tapas Entertainment and how many employees at Tapas Korea will be laid off. According to local media outlets, Tapas Korea has about 20 employees.
All of these moves comes after a stunning rollercoaster of acquisition and contraction that played out over the last two years against the background of a rumored IPO by Kakao.
Tapas Entertainment was founded in 2003 by entrepreneur Chang Kim, who announced his departure from the company in January. Originally launched as an online comic book publishing platform, in 2012, Tapas underwent a major rebranding, changing its name and expanding its focus to include a mobile app. With the rise of Webtoon – owned by rival Korean tech giant Naver – and the increasing popularity of mobile comics in general, Kakao, itself a giant of Asian tech, acquired Tapas and Radish, a UGC (user generated content) platform for prose, for a combined amount reported as more than $900 million in May 2021. A period of rapid expansion and hiring followed, as both Tapas and Webtoon seemed set on expanding their original editorially driven content, with former DC exec Michelle Wells in charge at Tapas and many hired that followed.
However, just as quickly the new team was laid off or left in July 2022, with a move away from Originals and more to UGC announced under editor in chief Gabrielle Luu.
According to Tech Crunch, Kakao Entertainment will take over the duties previously handled by Tapas Korea. According to knowledgable observers contacted by the Beat, the Korean office was mostly a production office, and since Tapas was originally a US company it doesn’t represent a major reduction in content.
In same ways, it’s like how Amazon is in the process of absorbing Comixology into its existing Kindle operations. All of this can be seen as part of the general contraction of the once limitless tech world.
Naver/LINE Webtoon has undergone similar expansions and contractions: Naver just laid off about 15% of the workforce at Wattpad, Korea-basded Yonhap News reports.
In a post on the company’s bulletin board on March 8, Nam Kyung-bo, interim CEO of Wattpad, said the company let go of 42 employees out of a 267-person team to realign its business in accordance with the changing environment.
Adding to all the turmoil, like many tech companies, Tapas Entertainment did its banking at SVB, the recently failed bank of choice for start-ups and tech companies alike. A Kakao spokesperson said the cutbacks were not related to this, however:
The company is currently preparing measures to deal with the fallout of the SVB collapse, including diversifying assets into different banks and accounts. Due to the U.S. government and regulators’ quick actions, which will guarantee all deposits, the spokesperson said there should not be any effect on the company.
While the size and scope of the revamped Tapas Entertainment remains to be seen, both Tapas and Webtoon are dealing with increased pushback from creators about their contracts – and in Asia, the long working hours which have led to depression and suicidal thoughts. Meanwhile, Kakao has many other irons in many other fires. Their main business is as an agency, including handling rights to many world famous K-pop stars. In recent weeks they made headlines in a dramatic battle with Hybe, the giant agency that handles the world’s biggest band, BTS, over rights to SM, yet another iconic K-pop agency that handles NCT 127, EXO, BoA and Girls’ Generation. This battle ended with Hybe withdrawing, but Kakao’s offer still on the table.
