Samsung 2.5% vs Union 8.1%... Struggles Over This Year's Wage Negotiations

Labor-Management Council Demands 5.74% Increase
Burden of Semiconductor Deficit

Samsung Electronics is experiencing labor-management conflicts over this year's wage increase rate.

According to industry sources on the 15th, Samsung Electronics proposed a basic wage increase rate of 2.5%, which corresponds to the expected inflation rate, during negotiations on this year's wage increase rate with the Labor-Management Council, consisting of employer and employee representatives, and the nationwide Samsung Electronics Labor Union (hereinafter referred to as the union), which holds the representative bargaining rights.

On the other hand, the Labor-Management Council reportedly demanded 5.74%, and the union demanded 8.1%. The council expressed a stance of 'unacceptable' toward the company's proposal. The union stated, "The company shows no sincerity in the negotiations," and has also activated a dispute countermeasure committee for 'collective action.'

Samsung Electronics, Seocho-gu, Seoul.
Photo by Yonhap News

Samsung Electronics' average wage increase rate is the growth rate of the total annual salary budget paid to all employees, determined by adding the individual performance-based increase rate to the basic increase rate. Last year, it was set at an average wage increase rate of 4.1%, including a basic increase rate of 2% and a performance increase rate of 2.1%, but the union's joint bargaining group opposed it and filed for dispute mediation. This year's wage negotiations are being conducted by combining last year's and this year's negotiations.

Last year, Samsung Electronics recorded a loss of 15 trillion won in the Device Solutions (DS) division, which is responsible for the semiconductor business, due to the downturn in the semiconductor market. This year, the semiconductor business's return to profitability remains uncertain due to continued losses in non-memory sectors such as foundry.

Amid heightened concerns over this unprecedented crisis, which marked the largest loss since the company's founding, the DS division held an emergency executive meeting last month chaired by Kyung Kye-hyun, head of the DS division (president), and decided to freeze the annual salaries of DS division executives for this year.

This content was produced with the assistance of AI translation services.