A strike involving more than 47,000 Samsung Electronics workers is set to begin Thursday after wage negotiations between the company and its labor union collapsed, rattling investor confidence and sending the company’s shares down about 3%.
The breakdown followed a failed mediation effort in which the union agreed to a proposal from South Korea’s labor relations commission, while Samsung ultimately rejected the terms. A union spokesperson said the company initially requested additional time to continue discussions, but later stated that no final decision had been made, leaving talks at an impasse. The union said it regrets the breakdown of the post-mediation process but plans to continue seeking a resolution even as the strike moves forward.
Samsung, meanwhile, said negotiations fell apart because accepting what it called excessive union demands would undermine core management principles. The company also stressed that it remains open to dialogue until the last possible moment, while maintaining that strikes should not take place under any circumstances.
The planned walkout is expected to be limited in scope due to a court order requiring that essential safety operations and critical facilities not be disrupted, a measure aimed at protecting semiconductor production lines and equipment.
At the center of the dispute is Samsung’s performance-based bonus system. The union is demanding bonuses equivalent to 15% of the company’s operating profit, the elimination of caps on payouts, and a more formalized and transparent structure for compensation. The current system limits bonuses to a percentage of salary, which the union argues prevents workers from fully sharing in the company’s strong earnings.
The disagreement over removing the bonus cap has been the most significant sticking point, with critics noting that uncapping payouts could have long-term implications for profitability even during strong market cycles.
South Korean government officials had urged both sides to reach an agreement ahead of the strike and reportedly considered possible intervention measures that could temporarily suspend industrial action if it was deemed to pose broader economic risks under labor law.
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