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| Yanolja founder Lee Su-jin speaks during a press conference at Fairmont Ambassador Seoul in this June 20 file photo. Courtesy of Yanolja |
By Park Jae-hyuk
Yanolja, a hotel booking app operator, told its employees earlier this week that it will carry out a voluntary redundancy program by Oct. 6. Those who wish to leave the company can receive cash payments equivalent to four months of their salary or three months of their paid leave.
"To achieve our goal of leading the digitalization of the global tourism industry, we need an organization that can flexibly cope with the changing external environment," the company said in an email sent to its employees, Monday.
Although Yanolja emphasized that the program is not related to its worsening profits, the decision was made after declaring a loss for the first half of this year, suffering a 28.4 billion won ($21 million) operating deficit.
The losses were in stark contrast to the earnings achieved by its chief rival, GC Company, which posted an operating profit of 18.2 billion won for the first half, up 80 percent from a year earlier. According to the mobile app market tracker Mobile Index, the monthly active users (MAUs) of GC Company's Yeogi Eottae booking app also reached 3.92 million last month, narrowing the gap with Yanolja's app, which attracted 4.11 million users.
Yanolja's deteriorating profitability has been attributed to its aggressive mergers and acquisitions as well as investments.
With the aim of becoming a global travel tech firm, Yanolja acquired Interpark, Dailyhotel, Triple and Go Global Travel. After its acquisition of Interpark, the company doubled its spending on ads, hiring actress Gianna Jun as a spokesmodel to promote the e-commerce firm on TV and YouTube.
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| Actress Gianna Jun promotes Interpark in this company ad. Courtesy of Interpark |
In addition, Yanolja's expenditure on personnel last year was 197.2 billion won, up 112 percent year-on-year. Due to falling productivity, it ended its full work-from-home system in April to carry out a hybrid work system, which forces its employees to work at the office at least three days a week.
"Yanolja's productivity hit the bottom, and to be exact, its growth has stopped," Yanolja founder Lee Su-jin reportedly told its employees at that time.
Against this backdrop, it has become more uncertain whether Yanolja can go public. The company was reportedly pushing ahead with its Nasdaq listing scheduled for 2023, after hiring Goldman Sachs and Morgan Stanley as underwriters for its initial public offering in the U.S.
However, the estimated value of Yanolja, which was once considered a "decacorn" company with more than a $10 billion valuation, fell to 4.4 trillion won, according to Stockplus, an investment platform run by Dunamu.
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