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[Alpha Biz=(Chicago) Reporter Kim Jisun] Naver is reducing overseas business trips and various expenses. It is a paving stone to increase profitability through cost efficiency equivalent to 'emergency management'. Some analysts say it is a preemptive measure to cope with the government's move to tighten regulations.
According to the industry on the 13th, Naver's major business unit has started to cut costs intensively. In order to reduce the cost of overseas business trips, the number of business trips is limited and minimized. There is also a business unit aimed at reducing costs by more than 40% from the previous year. Most overseas business trips are replaced by video conferencing. The principle is to allow only business trips to areas that are essential, such as Saudi Arabia, such as follow-up dispatch due to existing business contracts.
Naver is said to restrict even business trips to Japan, which takes about two and a half hours from Korea. Line, a Japanese subsidiary of Naver, is also applying a policy to minimize overseas business trips. "About 10 to 20% of all employees worked on overseas business trips," a company official said. "In the past two months, the number of business trips is close to the 'zero' level."
As global Big Tech's investment in new technologies and business expansion continue, there is a red light on market defense. The spread of the "multi-homing" trend that uses multiple platforms at the same time in accordance with user needs is also likely to be a negative factor for Naver, the No. 1 platform operator.
Profitability is also deteriorating. Naver's operating profit ratio stood at 14.5% in the first quarter of this year. It is 1.9 percentage points lower than the same period last year (16.4 percent). Naver's quarterly operating profit ratio has declined for six consecutive quarters since the third quarter of 2021 (20.3%).
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
