Samsung union warns of unprecedented walkout as tech slump persists

SEOUL – Samsung Electronics faces its first labour strike after an influential union threatened to stage a walkout to protest over wages and the company’s alleged bids to block labour organisation.

The union, which says it represents about 9 per cent of Samsung staff or about 10,000 employees, issued a statement on Thursday accusing South Korea’s largest company of shutting its leaders out of salary negotiations.

The union had previously asked for wage increases of more than 6 per cent this year, in part to offset domestic inflation running at more than 4 per cent.

Samsung management announced last month a 4.1 per cent hike for its best performers and 2 per cent for average workers for 2023, according to the union.

It is unclear if the organisation will follow through with its warning.

But the unrest comes at a bad time for Samsung, which is struggling to cope with waning global demand for everything from memory chips to smartphones and appliances.

Samsung, a proxy for the global tech economy,

posted a record US$3.4 billion (S$4.5 billion) loss in its chip division alone for the March quarter.

The union is also demanding that Samsung chairman Lee Jae-yong join the discussions.

“We will decide whether to go on strike after discussing with our 10,000 members,” said Mr Lee Hyun-kuk, a representative of the National Samsung Electronics Union, at a press conference in front of Samsung’s building in Gangnam, Seoul.

“It depends on the attitude of chairman Lee Jae-yong. We sincerely ask him to come to the table for talks.”

If Samsung goes on a strike, the other 11 unions at Samsung Group affiliates such as builder Samsung C&T or electric car battery maker Samsung SDI will follow suit, said Mr Oh Sang-hoon, a union representative of Samsung Fire & Marine Insurance.

“We are not here just for a salary hike, but also to protest against Samsung’s crackdowns on the union,” Mr Oh said.

“The chairman apologised for a union-free management in 2020, but he still has not met us.”

Asia’s largest electronics company said last week it expected demand to only gradually improve in a range of markets from smartphones to PCs and storage, driven by a Chinese economic recovery and accelerating development in artificial intelligence.

This could begin happening only from the second half of this year.

South Korean unions are an influential voice in local politics and company strikes are not uncommon, but the walkout would be the first to hit Samsung since its 1969 founding.

Samsung’s unions secured the right to strike last year after wage talks failed, but did not follow through. BLOOMBERG