Samsung suspends 18-day strike after tentative bonus agreement
The settlement abolishes the previous bonus cap and allocates 10.5 percent of annual operating profits to employees, contingent on the memory division meeting specific profit targets.
Samsung Electronics’ largest labour union in South Korea has suspended a planned 18-day strike affecting memory chip production after reaching a tentative agreement with the company regarding employee bonuses. The walkout, originally scheduled to begin on 21 May, would have involved nearly 48,000 workers, the majority of whom belong to the memory division, which is the company’s primary revenue generator.
Under the terms of the deal, Samsung has agreed to abolish the previous cap on bonuses, which was equivalent to 50 percent of annual salaries. The company will also allocate 10.5 percent of its annual operating profits to an employee bonus pool. This figure is lower than the union’s initial demand of 15 percent but exceeds the 10 percent payout rate at rival SK Hynix, which had previously drawn Samsung personnel away with bonuses three times higher than those offered by Samsung.
Distribution of the bonus pool will see 40 percent allocated to memory chip division workers, with the remaining 60 percent divided among other Samsung units. Payments are contingent on the memory division achieving specific profit targets: KRW 200 trillion ($133 billion) from 2026 to 2028, and KRW 100 trillion ($66 billion) from 2029 to 2035. A portion of these bonuses will be paid in company stock for a period of at least 10 years.
The negotiations were mediated by South Korean Labor Minister Kim Young-hoon, who facilitated the resumption of talks mere hours after the strike was announced. Samsung accounts for 12.5 percent of South Korea’s GDP, and Prime Minister Kim Min-seok had previously warned that direct losses from the strike could reach KRW 1 trillion ($669 million), with total economic impact potentially hitting KRW 100 trillion ($66 billion) if production was halted.
Union leader Choi Seung-ho announced that unionised workers will vote on the tentative agreement between 22 and 27 May, with a final agreement contingent upon the outcome of this vote. In a statement, Samsung emphasised its commitment to building a more mature labour-management relationship to prevent future disruptions.
