Samsung Avoids Major Strike as Union Suspends Walkout Plan

Samsung has avoided a major strike after its labor union suspended a planned walkout involving around 50,000 workers. This came just hours before the strike was set to begin, raising concerns about potential disruption to chip production. The strike was called off after the sides reached a tentative agreement.

Samsung reaches tentative deal with union, strike put on hold

Samsung’s labor union declared a general strike from May 21 through June 7. This came after the union failed to reach an agreement with management over performance bonuses. The talks were held under mediation by the National Labor Relations Commission. However, later, both sides resumed talks, with South Korea’s labor minister attending the session, and reached a tentative agreement.

As a result, the union has suspended the strike until further notice and asked all members to take part in a vote on the tentative agreement. They will vote between May 22 and May 27. The outcome may decide whether to officially accept or reject the contract.

“The agreement, though belated, came thanks to the support of the public, shareholders and customers, the government’s tireless mediation efforts and employees who steadfastly remained at their posts,” said Samsung in a statement.

If you are unaware, the union originally demanded 15% of operating profit as a performance bonus pool, with no cap on payouts. Management proposed 10% allocation while maintaining an existing cap on total payouts. The tentative agreement puts the bonus pool at 10.5% of business performance without a cap.

Furthermore, 60% of the bonus pool will go to any profit-making units, while 40% will be shared across the entire DS division. This means loss-making divisions will also receive part of the bonus, though the payout will be smaller. The new ratio system will come into effect beginning in 2027.

We’ll let you know whether the tentative agreement is officially approved after the union vote ends on May 27.