More than 47,000 Samsung workers set for an 18-day strike after bonus talks collapse
Samsung's union is seeking performance bonuses worth 15% of operating profit
More than 47,000 Samsung Electronics workers are preparing to begin an 18-day strike from Thursday after bonus payment negotiations between the company and its union broke down.
The industrial action will be confined to Samsung's domestic chipmaking plants, raising fresh concerns about memory chip supply at a time when the market is already dealing with constrained production.
How the talks fell apart
Whilst the union had agreed to a mediation process proposed by South Korea's National Labour Relations Commission, Samsung Electronics management rejected the deal without offering any explanation, according to Nikkei Asia. The terms of the proposed mediation have not been made public.
What the union is demanding
The Samsung union is seeking performance bonuses equivalent to 15% of the company's operating profit, as well as the removal of an existing cap that limits bonuses to 50% of annual wages.
The dispute has intensified, given that Samsung has been recording record profits during this period, having established itself as the world's largest producer of memory chips.
Government pressure
South Korean government officials had urged both sides to reach an agreement in the days leading up to the planned strike. Prime Minister Kim Min-seok reportedly warned that the government could intervene to prevent the industrial action from proceeding, citing South Korean law that permits an "emergency adjustment" to be invoked when disputes pose a risk to the economy or daily life.
The stakes are considerable. According to CNBC, Samsung is South Korea's largest company, accounting for approximately 23% of the country's total exports and 26% of its entire stock market capitalisation.
