Samsung strike to disrupt supply of semiconductors
Samsung Electronics’ management and the labor union were unable to reach an agreement, paving the way for the layoffs of 48,000 workers.
The strike, which begins Thursday, threatens the health of the South Korean economy and will likely disrupt global semiconductor supplies.
Under intense pressure from the government and business groups to prevent the strike, the two sides reached an agreement on bonus payments before the 18-day strike began.
Union leader Choi Seung-ho said the strike would continue because management failed to reach agreement on even a single sticking point remaining in government-brokered talks.
“I would like to make it clear that we have accepted the final offer presented by the government mediator,” he told reporters.
“We are deeply saddened and disappointed, but the union plans to continue the strike in accordance with the law,” Choi said.
Samsung Electronics said in a statement on Wednesday that the union was insisting on “unacceptable demands”, including bonus amounts for loss-making units.
“The reason why no agreement was reached… is that accepting the extreme demands of the labor union undermines the fundamental principles of company management,” he said.
Following the news, its shares lost 3.1 percent of their value.
The union demanded that Samsung remove the bonus cap of 50 percent of annual salaries, allocate 15 percent of annual operating profits to bonuses, and that these changes be formalized after one year.
The South Korean government threatened over the weekend to step in and issue an emergency arbitration decision, citing the negative impact the strike could have on the economy.
The rarely implemented measure would prevent the strike from continuing for 30 days while the government mediates negotiations.
Samsung accounts for almost a quarter of the country’s exports.
It is also the world’s largest maker of memory chips, and production cuts could negatively impact global supply at a time when the AI boom is causing shortages.
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