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| A pedestrian passes by a real estate agency in Seoul, Wednesday. Yonhap |
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| Zigbang CEO Ahn Sung-woo / Korea Times file |
Zigbang, the operator of Korea's leading real estate brokerage app, is asking some of its employees to resign and offering them compensation packages equivalent to three months of wages, according to industry officials, Sunday.
The request was reportedly made as the company's financial losses have grown rapidly over the past few years.
Zigbang's regulatory filings showed that its operating loss rose to 37.1 billion won ($28 million) in 2022 from 8.2 billion won in 2021. Its net loss also soared 296 percent to 51.5 billion won in 2022 from 13 billion won in 2021.
The company's payroll doubled to 23.4 billion won in 2022 from 10.4 billion won in 2021.
This has been attributed mainly to Zigbang's decision in 2021 to hire a large number of experienced software developers.
At that time, the company also decided to pay 20 million won higher annual wages to developers, while raising the annual salaries of non-developers by 10 million won. Programmers who moved from other companies were also paid bonuses equivalent to annual wages at their previous workplaces.
Amid the snowballing loss, Zigbang CEO Ahn Sung-woo is said to have told employees last month that he will not receive his wage.
Although Zigbang explained that it has annually adjusted its workforce and that its loss resulted mainly from the cost of its acquisition of Samsung SDS's home internet of things (IoT) unit last July, industry officials have remained skeptical about the real estate platform firm making a turnaround.
Zigbang has relied on commissions from real estate agents who use its app to attract customers
The volume of housing transactions in Korea, however, halved to 508,790 in 2022 from 1.01 million in 2021, according to the Korea Real Estate Board.
"Zigbang seems to have been too aggressive in its investments over the past few years," an industry official said. "Due to the housing market slump, investors have been reluctant to bet on real estate platform operators."
Last year, another real estate brokerage platform operator, Ziptoss, also asked some of its employees to resign, after it failed to attract additional investments.
Amid the worsening outlook, market observers are wondering whether Zigbang will be able to overcome its difficulties by securing "oil money" from the Middle Eastern countries. In February, the company joined hands with Saudi Arabia's National Housing Company to enter the Middle East's smart home market.
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