Kakao Entertainment, owned by South Korean tech giant Kakao, will shut down the Korean branch of Tapas Entertainment, the U.S.-headquartered storytelling platform, next month.
Kakao Entertainment told TechCrunch that it plans to close the Korean office as part of a restructuring effort to zero in on the company's North American and other global units. The closure will also include layoffs impacting the Korean-based team.
"Tapas Entertainment is streamlining operations to respond flexibly [and quickly] in the North American market in response to the global economic downturn," a Kakao Entertainment spokesperson told TechCrunch. "Tapas Korea has been in the service of operation and marketing of Tapas Entertainment that is headquartered in the U.S."
The company did not provide the total number of employees at Tapas Entertainment and how many employees at Tapas Korea will be laid off. According to local media outlets, Tapas Korea has about 20 employees.
Kakao Entertainment has three core units: an artist agency (Kakao Entertainment), a storytelling unit (Tapas Entertainment) and a Spotify-like music business (Melon).
Kakao Entertainment will take over the duties previously handled by Tapas Korea, a decision made because the larger organization has more experience and capabilities, the spokesperson explained. They added that this is not related to Silicon Valley Bank's failure last week despite the fact that Tapas Entertainment is a depositor of SVB. The company is currently preparing measures to deal with the fallout of the SVB collapse, including diversifying assets into different banks and accounts. Due to the U.S. government and regulators' quick actions, which will guarantee all deposits, the spokesperson said there should not be any effect on the company.
The spokesperson also said the restructuring is not related to an ongoing acquisition deal talks Kakao is holding regarding K-pop agency SM Entertainment.
The news of the Korean branch shutdown comes nearly two months after Kakao Entertainment's massive fundraising of about $966 million (1.2 trillion won) from Saudi Arabia's Public Investment Fund and Singapore's sovereign fund GIC earlier this year. The company said it would use the financing for further international expansion and acquisitions.
In May 2022, Kakao Entertainment merged two storytelling platforms, Tapas and Radish Media, to accelerate Kakao Entertainment's growth in North America. After the merger, it rebranded the combined unit to Tapas Entertainment.