Global corporations Unity, which along with Unreal divides up the global game engine market, is facing controversy in Korea as it carries out restructuring using "placement on standby." Instead of direct layoffs, the company excludes employees from work and cuts their pay to induce voluntary resignations, a method that labor groups say is in effect coercive pressure to quit. Through this method, it was found that 50% of the total workforce was recently restructured.
According to the Unity Technologies Korea branch of the Financial and Service Workers' Union on the 16th, since forming a union at the end of last year, it has made the restructuring issue a key agenda item and is responding to it. The union has been holding protests in front of the office building near Yeoksam Station in Seoul, calling for the withdrawal of the placement-on-standby measure.
A union official said, "Placement on standby began at the end of last year, and after a certain period it is converted to a leave of absence, reducing wages to about 70%," and added, "Given the nature of IT jobs, it is hard to endure when completely excluded from work, so in the end people choose to resign." The official added, "Legally it is not a layoff, but in reality it is no different from pushing people out."
The official also said, "While cutting headcount this way, management compensation was raised significantly," and noted, "Inconsistent HR policies keep recurring, such as hiring staff and then, after six months, pushing them to resign." The official added, "Irresponsible restructuring should stop, and personnel should be reasonably reassigned."
Unity's workforce reduction aligns with a global wave of restructuring. After going public in 2020, the company rode the Metaverse boom to pursue aggressive mergers and acquisitions and business expansion, but later launched large-scale layoffs as profitability deteriorated. Since 2022, it has cut more than 3,000 people and downsized the organization, with headcount reportedly down to about half of its peak. The global workforce that once reached 8,000 has now fallen to about 4,000.
The Korea branch is no exception. The workforce, which once stood in the 230s, has fallen to around 120. Last year, restructuring continued, including the entire customer support organization being laid off, fueling internal backlash that led to the formation of the union.
However, in Korea, because the Labor Standards Act sets strict conditions for layoffs, direct headcount cuts like those at headquarters are not easy. As a result, corporations often use personnel measures such as "placement on standby" to reduce staff. When there are managerial reasons, placement on standby allows payment of only about 70% of the average wage, and legally it is recognized as a "temporary measure," not a layoff.
Labor groups, however, see this as a "typical layoff-avoidance tactic." They argue that when exclusion from work and reduced pay are prolonged, workers have little choice but to resign on their own. The Unity Korea union also said, "There have been cases where placement on standby has led to resignations."
An IT industry official said, "In Korea, where the risk of layoffs is high, corporations often use placement on standby and similar measures to reduce expense burdens and litigation risk," adding, "There may be no legal issues, but from a worker's perspective it may feel no different from a layoff."
In response, Unity Korea said, "Unity is aware of local union activity in Korea and respects employees' rights to organize and express their opinions," adding, "We continue to follow the prescribed procedures under Korean labor law."