Samsung was facing the biggest strike in its history in its Device Solutions business, thanks to it posting record sales but not sharing much the profits with its employees. Now, however, the labor union suspended its planned 18-day strike, following a round of negotiations led by South Korea’s minister for labor and employment. These talks resulted in a tentative agreement.
Now all members of the union will vote, from May 22 to May 27, on whether to accept the tentative agreement that was proposed. Samsung would allocate a special bonus equivalent to 10.5% of operating profits to its chip division, and would accept the union’s demands to link bonuses to operating profits and abolish a bonus cap. The chip division would also receive 40% of the total bonus pool, on top of the aforementioned special bonus.
The union had sought bonuses equivalent to 15% of Samsung’s operating profits, the removal of bonus payout caps, as well as a formalized bonus structure.
South Korean Prime Minister Kim Min-seok previously estimated that the direct losses, had the planned 18-day strike gone through, would have amounted to KRW 1 trillion (about $660 million). Samsung accounts for 22.8% of Korea’s total exports, and 26% of its market capitalization, so anything that happens to Samsung basically happens to the country.