By Baek Byung-yeul
| Kim Hyung-rae, former Oracle Korea CEO |
Oracle has been in a state of shock after CEO Kim Hyung-rae and nearly a dozen senior officials, including three vice presidents, decided to quit.
Oracle Korea said Wednesday that its CEO will soon leave the company for personal reasons. His abrupt departure is reportedly due to his failure to manage labor-related issues and boost business performance.
In addition, the Korean unit has been in the hot seat for its poor labor management system. Its union began an 83-day walkout May 2018, demanding fair compensation and enhanced working conditions.
The union members returned to work, but its leaders held a protest in front of ASEM Tower in southern Seoul where Oracle Korea's branch office is located.
Oracle Korea also has been in conflict with the government after the National Tax Service imposed 314.7 billion won of penalties in 2016 after discovering that it transferred 2 trillion won of operating profit between 2008 and 2014 to overseas tax havens.
Company officials in the industry said the string of scandals and controversies may damage the firm's dominant status in the database management service (DBMS) market here.
"Large companies, which have been Oracle's main clients, are planning to diversify their data management system by adopting cloud computing services. This will have a negative impact on the business," said an official who wanted to remain anonymous.
Oracle Korea has gained its biggest revenue here in the DBMS market, a collection of programs designed to store, process and change information on databases. The firm had about a 60 percent market share in the sector in 2018.
The dispute between labor and management is another issue the firm has faced. Oracle Korea said the firm is working closely with the union to reach an agreement, but the latter claimed the management had not been actively engaged in collective bargaining.
The union claimed employees have not had any wage increases over the past 10 years and have struggled with heavy workloads as some of them worked about 80 to 100 hours a week before the 52-hour working week system was introduced in 2018.
Ahn Jong-cheol, head of the union, argued that the string of resignations of the firm's executives is a condemnation of Oracle's poor labor management relations.
"The resignations began in January after officials from the firm's headquarters in the U.S. witnessed the demonstrations of the union," Ahn said.
"Oracle Korea held a press conference introducing its cloud service in Seoul, Jan. 29. We held a strike in front of the conference building, and executives from Oracle headquarters in the U.S. took a lot of photos of us. After that, an executive dealing with labor management relations left the firm in late February," he said.
Ahn said the U.S. headquarters is taking this seriously, regarding how the strike will impact its other overseas branches.
"Though the U.S. branch has no union, employees of its European branch do. Not only the unions in European countries but also overseas branches in Asian countries where there aren't any unions yet are keeping their eyes on what's happening in Korea," he said.