Naver’s internal shakeup spurs backlash as founder returns

New grading system, return of ex-executive linked to past scandal stir employee unrest

Naver founder Lee Hae-jin has returned to the helm after seven years, launching a sweeping overhaul of South Korea’s top internet company as he pushes for bold internal reforms—but not without controversy. /Chosun DB

After stepping back into management for the first time in seven years as board chair in March, Naver founder Lee Hae-jin is driving sweeping changes at the company, including an organizational overhaul and a new personnel system.

Lee is shifting the company’s HR structure to focus more on performance and is establishing several technology and investment-related divisions.

Although the South Korean internet giant has posted record earnings in recent years, it has struggled to produce meaningful results in emerging fields such as artificial intelligence and content. As a result, its stock price has declined.

Lee’s efforts to “turn crisis into opportunity,” as he put it, have stirred backlash within the company.

In particular, his decision to bring back one of his closest aides—who had previously stepped down over a workplace bullying incident that led to an employee’s suicide—has triggered criticism from employees. One tech industry source said some workers appear to view Lee’s return as a “crackdown” or a regression to the past.

The first major move under Lee’s return was a corporate restructuring. In February, Naver unveiled plans to roll out a new personnel evaluation system called the “level system.”

Under this framework, all employees will be graded on a seven-level scale based on job performance and expertise, regardless of their years of service.

The levels will be tied to compensation. The change marks a departure from Naver’s current flat organizational structure, where everyone except executives is classified as “team members.”

The new system aims to foster internal competition and build a performance-driven culture. Naver plans to pilot the system this year and fully implement it by Mar. 2026.

Founded in 1997 as an in-house venture at Samsung SDS, Naver has grown into one of S. Korea’s leading platform companies.

Over time, however, it developed a stable corporate culture—so much so that the nickname “Nemoowon,” a mashup of “Naver” and “public servant,” became common among employees.

During an internal talk in 2012, Lee said he was “shocked and disheartened” to read a post on the company’s message board from a worker who claimed they had moved from Samsung to Naver for an easier life.

According to an industry insider, “Naver is the only major S. Korean IT firm that still allows full remote work. In some departments, people only see each other face-to-face once every six months.”

Lee is also forming new divisions to push forward his vision for innovation. One such unit is the “Tech Business” division, which will explore global tech ventures in countries like India and Spain. Lee has tapped Choi In-hyuk, a former chief operating officer and longtime confidant, to lead the unit

A developer by training, Choi worked with Lee during their time at Samsung SDS and is considered one of the company’s founding members. By bringing back someone with deep knowledge of both Naver and technology, Lee appears to be aiming for a shift away from the company’s current business-centric approach. Some observers say Choi may serve as a de facto chief technology officer.

Naver has its own large language model, HyperCLOVA X, but has so far struggled to compete with global tech giants. In a bid to secure access to cutting-edge technologies, the company plans to establish a new investment arm, Naver Ventures, next month, which will focus on U.S. startups.

Despite these efforts, Lee’s transformation drive is facing internal resistance. The level system, scheduled for rollout next year, had previously been scrapped in 2020 due to strong pushback from employees.

Critics at the time warned that the new system would give too much power to managers in charge of evaluations and could intensify short-term performance pressure at the expense of innovation and collaboration.