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A luxurious strike at Samsung Electronics

Published: 30 May. 2024, 19:17

Samsung Electronics faces its first-ever strike by workers in its 55-year corporate history. The National Samsung Electronics Union, representing more than a fifth of the company’s total workforce, vowed to go on a strike if its demands are not met. The union demands clear and transparent guidelines to explain bonus payments, which hold a bulky weight on salaries, as the bonus is tied to the company’s operating profits. The company currently pays incentives based on economic value-added metrics, which means zero payment to deficit-incurring business divisions.

The first collective action by the workers is to hold a one-day protest with all union members taking their paid leave on June 7. The union plans to expand the walkout to eventually grow into a full-scale strike depending on the progress in negotiations with management. The union is the largest among the five unions in the company after the management allowed employees to organize labor unions in 2019. Currently, the union has 28,400 members, or 22.8 percent of the company’s total employees of 124,804. The size of the union grew after the workers in the Device Solution (DS) division, responsible for chipmaking, joined the union after the company did not pay any bonuses last year due to its poor chip performance.

The union’s collective action is certainly a constitutional right. Samsung Electronics has been reinventing its relationship with workers after it discarded its no-union policy in 2020. The Samsung Electronics stock tumbled 3.1 percent after the possible strike added to the company’s challenging prospects that led to the replacement of the top executive in the chip division and an emergency six-day workweek for executives.

Samsung Electronics incurred an operating loss of 15 trillion won ($11 billion) from its chipmaking operation last year. The world’s top memory maker is being closely chased by the lower ranks. It is behind smaller local rival SK hynix in the sales of high-bandwidth memory (HBM), which is enjoying an AI boom. Samsung Electronics is also slipping further away from No. 1 foundry player TSMC in the consigned chip business. The chip competition is getting heated with other countries racing for supremacy. Samsung still maintains the lead in global smartphone sales, but it does poorly in major markets like China.

The Samsung union said that the morale of workers has slumped because they feel like they are not adequately awarded for their hard work. “If all the workers work with passion, Samsung has the potential to combat all the challenges,” the union said. Both the company and its workers must find a way to co-prosperity through dialogue, not confrontation. If Samsung Electronics can do that, it can truly come out stronger than before.