Thousands of Samsung Workers Prepare to Strike After Failed Talks

Samsung’s management and labor union failed to reach an agreement over performance bonuses. The union has now declared a general strike starting tomorrow, raising concerns about disruptions to the firm’s semiconductor business. Around 50,000 workers could take part in the strike.

Mediation between Samsung and the labor union ended without an agreement

Samsung’s labor union demanded 15% of the company’s operating profits as performance-based pay funds. In addition, they want the removal of the current bonus cap (limited to 50% of annual salary). Recently, both sides took part in mediation talks led by the National Labor Relations Commission (NLRC) to resolve the dispute. Unfortunately, the negotiations ended without an agreement.

“Management ultimately failed to make a decision, bringing the post-mediation process to an end,” said Choi Seung-ho, head of the Samsung Electronics branch of the Samsung Group cross-enterprise union. “The union will proceed with a lawful general strike starting tomorrow as planned.”

The labor union previously announced plans for an 18-day general strike from May 21 through June 7 if negotiations failed. The company’s workers even held a massive rally on April 23. Now that talks have collapsed, the union is moving ahead with its planned walkout. According to union officials, the strike could see participation from about 50,000 workers.

Samsung said that it accepted most parts of the proposed bonus structure. However, the union continued to demand compensation for loss-making divisions, which is difficult to accept. If you are unaware, the company’s foundry and System LSI businesses have been struggling with profitability.

The Korean firm also said that it will “continue efforts to resolve the issue through additional mediation or direct dialogue with the union.” A fresh report suggests that both sides will resume negotiations today. South Korea’s labor minister is expected to personally preside over the talks. We will let you know how the discussions go. Stay tuned.