Over 47,000 employees at Samsung Electronics are preparing for an 18-day strike following unsuccessful negotiations over bonus payments between the corporation and its union. The walkout, slated to commence on Thursday, will focus on Samsung’s domestic semiconductor manufacturing facilities, sparking worries about the strained production of memory chips amidst a global shortage.
Despite the union’s willingness to accept mediation suggested by South Korea’s National Labor Relations Commission, the specifics of which remain undisclosed, Samsung Electronics’ management declined the proposal without providing reasons, as reported by Nikkei Asia.
The union is demanding performance bonuses amounting to 15 percent of Samsung’s operating profit and the elimination of a restriction that limits bonuses to 50 percent of annual salaries. This breakdown in talks comes as Samsung enjoys record profits, cementing its status as the leading global manufacturer of memory chips.
In the lead-up to the strike, South Korean government officials, including Prime Minister Kim Min-seok, encouraged both Samsung and the union to reach a resolution. The Prime Minister hinted that the government might intervene to prevent the strike, as South Korean law allows for “emergency adjustments” in disputes that could negatively impact the economy or public life. As South Korea’s largest corporation, Samsung accounts for approximately 23 percent of the nation’s exports and 26 percent of its market capitalization, according to CNBC.
