Employees at Samsung Electronics went on strike for three days on Monday in protest of their pay, and the union is threatening to take more action if the biggest company in South Korea doesn’t comply.
Samsung Electronics employees went on strike for three days on Monday in protest of their wages, and if the largest conglomerate in South Korea doesn’t meet their demands, the union is threatening to take additional action. Aside from modifications to the employee bonus scheme, the National Samsung Electronics Union (NSEU), which has around 30,000 members and accounts for over a quarter of the company’s South Korean workforce, also demands an additional day of yearly leave for unionized workers. The world’s largest memory chipmaker is unlikely to see a major reduction in output due to low participation and automated production, according to analysts. However, as IT companies adopt artificial intelligence, it indicates a drop in employee morale at a critical juncture in the chip business.
In order to organize a mass walkout, the union staged its first industrial action last month. According to Samsung, this action had no effect on economic operations. The company announced on Monday that there was no production hiccup. The union announced that 6,540 workers, largely from manufacturing and product development, will go on strike this week. The group did not reveal the percentage of workers that participated in last month’s walkout. It stated that operations may be impacted by the walkout, which involves personnel who keep an eye on automated production lines and equipment. About 3,000 strikers gathered in the rain near Samsung’s headquarters in Hwaseong, south of Seoul, according to union officials.
Union head Son Woo-mok stated that the five-year-old union did not have enough time to teach members about the concerns, refuting media allegations of low participation. “Labor union education has not been sufficient. However, given that our union is still relatively new in comparison to other unions, I don’t believe that participation is low,” he stated. The vice president of the union, Lee Hyun-kuk, warned that if Samsung does not improve its offers, there may be more strikes.
According to sources, Samsung’s plans include flexibility in terms of yearly leave and salary, but they fall short of union demands for higher pay and leave. Union representatives favor parity in the bonus structure as well. They added that whereas bonuses for executives are determined by personal performance targets, bonuses for rank-and-file employees are determined by subtracting the cost of capital from operating profit. “I was telling people that I was proud to work at Samsung, but the truth is, I am not,” admitted Park Jun-ha, a 20-year-old engineer who joined the company in January and works on the chip packing lines. He also expressed dissatisfaction with the company’s “opaque” compensation structure.
Since Samsung promised in 2020 to stop opposing organized labor, the union’s membership has increased. According to observers, as Samsung attempts to negotiate the competition in semiconductors used for artificial intelligence (AI) applications, its growing voice is demanding attention. Due to the sluggish development of high-bandwidth memory (HBM) chips, which are in great demand for usage in AI processors, union leaders blame Samsung’s AI woes for the company’s lower share price performance than that of their country’s chip rival, SK Hynix (000660.KS).
Samsung nevertheless projected a more than 15-fold increase in second-quarter operating profit on Friday, as rising chip prices propelled by the AI boom helped boost earnings above the low comparative base of the previous year. After hitting a session high of 1.72% earlier in the day, its share price saw a 0.2% increase in afternoon trading on Monday, the best since January 2021. It increased by 6.9% last week as a result of preliminary quarterly earnings that beat analyst projections.
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