Editorial: Action, not delay, is needed to face Korea’s AI labor shock

According to a survey of employment, vacancies, and labor demand at establishments for the first half of 2025, released by the Ministry of Employment and Labor on June. 26, 2025, as of April 1 the number of unfilled positions stood at 469,000, down 10.0% (52,000) from a year earlier. Accordingly, hiring plans for the second and third quarters of this year also fell 9.7% (51,000) to 470,000. The photo shows a job information board at the Seoul Western Employment Welfare Plus Center in Mapo District, on the same day./Yonhap

South Korea’s two leading technology firms, Naver and Kakao, long regarded as symbols of innovation, have seen the number of employees in their 20s plunge — down 33% and 28% over the past two years. The decline reflects a sharp pullback in hiring as artificial intelligence takes over work once handled by humans. In 2021, Naver recruited 838 employees and Kakao 994, but by last year each company was hiring only about a third of that number.

Such retrenchment is becoming standard practice at companies undergoing what they call an “AI transition.” Major telecommunications providers SK Telecom Co. and LG Uplus Corp. have cut new hires by 30% and 62% over the past three years. Both have halted recruitment entirely for junior developer positions now deemed replaceable by AI. Samsung SDI Co., the battery-making arm of Samsung Group, and LG CNS Co., the information technology services subsidiary of LG Group, have also reduced intake by 30–40% in the same period.

“Whenever a vacancy arises, the first step is to check whether AI can fill the position,” an industry insider noted. “Under South Korea’s labor law, once a worker is hired there is no mechanism for dismissal, so companies preemptively reduce entry-level hiring.”

That even high-tech corporations are no longer able to offer opportunities to workers in their 20s underscores the labor shock unleashed by AI — a disruption that will only deepen. The failure to anticipate this shift and prepare for what lies ahead leaves the burden squarely on younger generations. Education and labor reforms can no longer be delayed.

Rote memorization and passive instruction cannot cultivate the creativity, problem-solving skills, and cross-disciplinary thinking required in the AI era. For more than a decade, graduates in science and engineering have been in short supply, while those in the humanities and social sciences have faced chronic unemployment. Yet efforts at structural reform in higher education remain blocked by entrenched academic interests. Antiquated systems — the rigid split between liberal arts and natural sciences, the 6-3-3 system, six years of elementary, three of middle school and three of high school — have been in place for more than 70 years and now obstruct the training of talent suited to the demands of AI. With rigid departmental quotas, South Korea falls short of thousands of AI specialists every year, a reality that is increasingly untenable.

The nation’s labor market, often described as the most inflexible in the world, has become an anchor weighing down its competitiveness in the AI age. To compound the problem, lawmakers are pushing ahead with the Yellow Envelope Bill, which would further restrict employers’ ability to respond to labor disputes. As the rest of the world moves toward an economy where fewer workers are needed, South Korea remains shackled by decades-old ideas, with those in power eroding the prospects of younger generations.

What is required is nothing less than sweeping reform. Education and labor policy must be overhauled, and employment strategies fundamentally rethought. Targeted vocational training for jobs at risk of disappearing, coupled with lifelong learning programs, must be put in place. The cases of Naver and Kakao are not anomalies but warnings of what is to come. Action cannot wait.