Samsung unions approve bonus deal, averting strike that threatened 12.5 per cent of South Korea’s GDP
The deal, approved by 73.7 per cent of union members, provides chip workers with bonuses up to KRW 600 million while non-chip staff receive significantly smaller sums, sparking internal resentment.
Samsung Electronics’ two largest unions in South Korea have voted to approve a wage agreement that averts an 18-day strike, following mediation by South Korean officials including Prime Minister Kim Min-seok and Labor Minister Kim Young-hoon. The deal was finalised just an hour before the walkout was scheduled to begin, preventing direct losses estimated at KRW 1 trillion ($669 million) and shielding the nation’s economy, where Samsung accounts for 12.5 per cent of GDP, from further disruption.
The agreement provides chip workers with bonuses of up to KRW 600 million ($400,000), representing approximately three times their annual salary. Bloomberg calculates that Samsung is expected to distribute KRW 40 trillion ($26.6 billion) in total payouts, averaging around $340,000 per employee. The company is projected to generate up to KRW 300 trillion in operating profit this year, with the chip division receiving 40 per cent of the bonus pool.
Payouts will be distributed in company stock over a period of at least 10 years. These distributions are contingent on the memory division achieving annual profits of at least KRW 200 trillion ($133 billion) from 2026 to 2028, and KRW 100 trillion ($66 billion) annually from 2029 to 2035. In addition to the bonus structure, Samsung agreed to abolish worker bonus caps and set aside 10.5 per cent of annual operating profits for payouts, meeting key union demands.
Voting results released by Yonhap News indicate that 73.7 per cent of the 62,616 members across the two unions approved the deal during a six-day voting period starting on May 22. Support was strongest within the largest union, which has 48,000 members predominantly from the chip division, where 80 per cent voted in favour. Conversely, the smaller union, which represents more non-chip workers, saw only 21 per cent voting in favour.
The disparity in the agreement has sparked tension and resentment among colleagues. While chip workers secure substantial bonuses, non-chip workers in smartphone, TV, and home appliance units are set to receive approximately KRW 6 million ($4,000). This significant gap in compensation highlights the internal divide between the company’s primary revenue generator and its other operational units.
