Samsung was facing the largest strike in its history within its Device Solutions division, prompted by record sales that did not translate into profit sharing for employees. However, the labor union has now suspended its planned 18-day strike following negotiations led by South Korea's Minister of Labor and Employment, which resulted in a tentative agreement.
Union members will vote between May 22 and May 27 on whether to accept the proposed agreement. Under the tentative deal, Samsung will provide a special bonus amounting to 10.5% of operating profits to its chip division. Additionally, it has agreed to the union's demands for linking bonuses to operating profits and eliminating the bonus payout cap. The chip division will be allocated 40% of the total bonus pool, in addition to the special bonus mentioned.
Initially, the union sought bonuses equivalent to 15% of Samsung's operating profits, the removal of bonus payout caps, and a formalized bonus structure.
South Korean Prime Minister Kim Min-seok previously estimated that if the planned 18-day strike had proceeded, direct losses could have reached KRW 1 trillion (approximately $660 million). Samsung represents 22.8% of Korea's total exports and 26% of its market capitalization, indicating that any disruptions to Samsung significantly affect the national economy.
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