Samsung is facing the biggest worker strike in its history over employee bonuses

Samsung’s memory division reported record Q1 sales, but the Device Solutions (DS) unit faces internal discontent. A strike involving 48,000 employees is planned to begin Thursday and could last 18 days unless an agreement is reached or government intervention occurs. The union demands abolishing Samsung’s bonus payout cap and allocating 15% of annual operating profit to bonuses. Samsung wants to concentrate higher bonuses on memory employees, while System LSI and foundry workers would receive much less. The union views this as unfair and warns that workers may leave for better pay, including opportunities at SK Hynix, which has shared AI-driven profits with employees by removing a bonus cap.

"Samsung's memory division reported record sales for Q1, but this has caused discontent within the company, specifically the Device Solutions (DS) business. DS is home to the memory business, System LSI (which designs chipsets) and the foundry business (which fabs chips for Samsung and external clients). Now Samsung is facing the biggest strike in its history - with 48,000 employees threatening to walk out - which is due to start on Thursday, unless an agreement is reached or the government intervenes. The strike is planned to last 18 days."

"The union sees that as unfair and is worried that unsatisfied workers can quit and look for work elsewhere (Samsung is already losing some employees to SK over the disparity in earnings). Samsung wants to focus bonuses on memory employees - the 27,000 strong workforce can receive bonuses that are at least six times higher than those that employees in the LSI and foundry business will receive. The union wants the company to abolish this cap and allocate 15% of its annual operating profit to bonuses."

"SK Hynix is also based in Korea and it is the world's second largest DRAM chip maker after Samsung. SK is raking in the profits from the recent AI boom too, but it is sharing them with its employees - recently, the company removed its bonus pay cap. Last year, this led to SK employees getting bonuses three times higher than their peers over at Samsung. This is partly because Samsung has a cap on bonus payouts that limits them to 50% of an employee's annual salary."

"There are additional considerations too - as detailed in the opening paragraph, Device Solutions is home to three different businesses. And while memory is hitting sales records, the other two aren't doing so hot. Samsung wants to focus bonuses on memory employees - the 27,000 strong workforce can receive bonuses that are at least six times higher than those that employees in the LSI and foundry business will receive. The union sees that as unfair and is worried that unsatisfied workers can quit and look for work elsewhere."

Read at GSMArena.com