As memory prices continue to rise, negotiations between Samsung memory division employees and management have made progress. Previously, Samsung employees took to the streets in April demanding that the company allocate 15% of its operating profits as bonuses, thus bringing the labor dispute into the open. The union had threatened an 18-day general strike starting May 21st if its demands were not met. Currently, Samsung management is expected to make some concessions and agree to distribute 10% of the profits as bonuses.
According to a report by the Korea Herald, union members revealed that Samsung management has agreed to fix employee bonuses for three years before further formalizing the system. Previously, during negotiations, management was close to agreeing to allocate 13% of operating profit as bonuses, but was unwilling to include this arrangement in the formal system.
Employees argue that while Samsung is larger than SK Hynix, its employee bonuses are only 30% of Hynix’s. Therefore, the union is demanding that Samsung issue bonuses equivalent to 15% of the semiconductor business’s operating profit, along with annual salary increases and the removal of bonus caps.
Samsung’s management had previously proposed a 10% bonus and a 6.2% pay rise. With the union still preparing for a general strike on the 21st of this month, Samsung’s management has now gone further, offering to incorporate the bonus arrangement into the existing system.
However, union members believe that the management’s plan is dividing employees and are calling on them to continue with the general strike plan. Based on 10% of Samsung’s operating profit, the total bonus would reach 35 trillion won (approximately 164.815 billion yuan at the current exchange rate), significantly higher than the 20 trillion won (approximately 94.18 billion yuan) previously distributed to employees by SK Hynix.
The report states that Samsung’s management agreed to fix the bonus arrangement for three years initially before formalizing it into a system. Employees are still demanding a higher bonus percentage than SK Hynix, arguing that Samsung is ahead of its competitors in the industry. The union also hopes that a formalized arrangement will ensure all business units receive the same bonus percentage and avoid repeated renegotiations in the memory division in the future.
On the 7th, several brokerages lowered their target share price for Samsung due to concerns that bonus payments would impact the company’s operating profit. The union is still insisting on a 15% bonus. The Financial Times, citing estimates, stated that if the strike continues for the full term, Samsung’s direct costs could reach between $6.9 billion and $11.7 billion.
