Samsung Electronics faces "first-ever strike in company history", stock price drops by about 1%

Due to a deadlock in the negotiations with management over the 2024 wage adjustment, Samsung's largest union, the "National Samsung Electronics Union," issued a statement today announcing the company's first strike in its 66-year history on June 7.

The issue arose in March this year when Samsung Electronics and the labor union representatives formed a labor-management committee and decided to increase employee wages by 5.1% in 2024. However, the union does not fully agree with this pay raise level. Since the beginning of 2024, both sides have been negotiating on specific salary increase amounts, employee performance bonus mechanisms, and other issues, but the negotiations have gradually stalled.

Samsung Electronics' stock price fell slightly by about 1% after the union threatened to strike.

A group of union leaders held up a banner with the following message: "We can no longer tolerate the oppression of workers and unions."

Although Samsung Electronics is South Korea's largest company, it has long been free from union constraints. It wasn't until 2020 that Samsung Electronics Vice Chairman Lee Jae-yong publicly admitted to suppressing employees from forming unions and other inappropriate behaviors, and apologized for it.

Since then, the union movement has been revitalizing within the company. Over the past two years, the membership of the National Samsung Electronics Union has surged from about 6,000 to 28,000, accounting for more than one-fifth of Samsung Electronics' total workforce, making it the largest among the company's five unions.

Last week, over 2,000 Samsung union workers held a rare rally in Seoul demanding wage increases.

In addition to the wage demands, the negotiations between the union and Samsung management also involve core issues such as increasing annual leave days for employees and establishing a fair and transparent performance evaluation bonus system. Samsung Electronics has stated that it will sincerely and actively participate in the upcoming negotiations.

Official data shows that the unionization rate in South Korea has not substantially increased over the past 20 years and remains relatively low compared to other OECD countries. However, there are signs that more and more young employees are realizing the importance of joining a union to protect their rights.

Some commentators point out that this wage negotiation dispute actually reflects the general concern in South Korean society about protecting the rights of employees in large corporations. As one of South Korea's largest private employers, Samsung Electronics' wage and benefits levels often have an impact on the entire domestic employment environment. Whether the two sides can resolve their differences and avoid Samsung's first actual strike in 66 years is not only crucial for the company itself but also a widely watched focus in South Korean society