Nearly 50,000 Samsung Electronics employees are set to walk off the job after efforts to clinch a deal on bonus payments fell through, threatening the health of South Korea’s economy and the global supply of semiconductors.
According to the union leader, Choi Seung-ho, the 18-day strike would go ahead after management failed to come around on one remaining sticking point in government-mediated talks.
"I want to make clear that we had accepted the final proposal presented by government mediator," he told reporters.
"We express deep regret and feel disappointed, but the union plans to go ahead with the strike according to the law.”
Samsung Electronics said the union insisted on “unacceptable demands” that included the size of bonuses for loss-making units.
"The reason an agreement could not be reached .... is that accepting the labour union's excessive demands would undermine the fundamental principles of company management," it said.
The union had demanded that Samsung abolish a cap on bonuses at 50% of annual salaries, allocate 15% of annual operating profit to bonuses, and that these changes be formalised beyond one year.
Over the weekend, South Korea’s government threatened to step in and order emergency arbitration, citing the adverse impact the strike could have on the economy.
The measure, which has been rarely employed, would prevent the strike from going ahead for 30 days while the government mediates talks.
The tech giant accounts for around a quarter of the country’s exports and is also the world’s largest chip maker.
Production disruption could dent global supply at a time when the AI boom has caused shortages.
At the time of writing, Samsung (KRX: 005930) shares have fallen 1.6%.
