Samsung's consumer electronics workers are not happy about its Rs 3.25 crore chip employee bonuses
A Samsung union representing the company's consumer electronics workers is set to challenge a massive bonus package for chip division workers in court. This bonus would see each chip division employee receive roughly Rs 3.25 crore.
Earlier this week, Samsung’s largest union approved a massive bonus package for 78,000 workers, part of the company’s semiconductor division. This package is expected to pay every chip division worker an average bonus of 513 million won (roughly Rs 3.25 crore), with the company spending around $26.5 billion. However, a minority labour union that represents Samsung’s consumer electronics workers is set to challenge this bonus deal in court.
As per a report from Reuters, the Samsung Electronics Co Union (SECU) will ask a South Korean court to suspend this Rs 3.25 crore bonus package. SECU has around 13,000 members, largely from the company's smartphone, TV and home appliances divisions.
Keep in mind that this pay package was agreed after threats of an 18-day strike that could’ve disrupted the global supply of semiconductors and memory chips.
Why are some Samsung workers against the bonus?
The bonus package mainly benefits employees in Samsung’s chip division, which has seen rapid growth thanks to the AI boom. Meanwhile, employees in other divisions such as smartphones or TVs are expected to receive relatively smaller bonuses.
This package had been approved after a vote by Samsung’s largest employee union. At the time, SECU had filed an injunction to suspend the vote. Now, the report states that the union will submit documents in the next week revising the injunction request. SECU expects to get a court ruling within a month.
Samsung chip division sees massive profits
Do note that the bonus agreement was reached at a time when Samsung’s chip has reported a 49-fold increase in profits as demand from AI datacentres for memory chips continues to increase. Samsung recently became the second Asian company (after TSMC) to cross $1 trillion in market cap, in part due to this growth.
As per reports, the company accounts for around 12.5 per cent of gross domestic product and memory chips make up about 35 percent of exports for South Korea.
Under the government-mediated agreement, employees in Samsung's semiconductor division are set to receive special bonuses linked to operating profit, following threats of an 18-day strike.
Under the agreement, annual bonuses for employees in the semiconductor division will amount to 10.5 per cent of the segment's operating profit and will be paid in shares, along with an additional 1.5 per cent in cash.
Reports put the average payout at 513 million won, or about $340,000, roughly Rs 3.25 crore. Though the bonus will come largely in shares.