Samsung Electronics of South Korea held its first strike since its founding on the 7th. The strike was triggered by discontent among some employees who had not received performance-based pay due to the slump in the semiconductor business. Samsung was once known for its fierce corporate culture and performance-based system, and had no connection to labor activism. With the company's declining presence in South Korea and changes in the attitudes of young people, the tightly knit elite group is at a turning point.
"It's a struggle!" "Respect labor!" At 9 a.m. on the 7th, in front of a Samsung office in Seoul. Holding a banner that read "If you ignore the workers, we'll strike," about 10 Samsung employees raised their fists and chanted.
The strike was called for by the National Samsung Electronics Workers' Union, the largest of Samsung Electronics' five labor unions. According to the union, the number of members is about 28,000 out of Samsung's total 120,000 employees, and it is characterized by the fact that many of its members are employees in the semiconductor division.
The strike was triggered by the decline in the performance of the semiconductor division. The division fell into an operating loss for the first time in 15 years in the fiscal year ending December 2023, affected by the worsening market conditions, and in January 2024, it did not pay performance-based pay to related employees. A union official said, "We understand the difficulties of the business. However, we would like the method of calculating performance-based pay to be reviewed."
The strike is scheduled to last only one day. According to Samsung, the semiconductor factory will continue to operate normally on the 7th and production will not be affected. The 6th was a national holiday in Korea, and the 7th is between a national holiday and a weekend, so many employees applied for annual paid leave.
Some employees have a cynical view. A male employee (37) who went to work as usual on the 7th said, "It's a kind of performance to strike on a day when many employees take annual leave. The company will not change if this happens."
On the other hand, a male employee (54) who works at a Samsung-affiliated insurance company said, "Employees at group companies welcome this demonstration." This is because Samsung Electronics has the largest sales in the group, and it is believed that it will affect the wage system of the entire company. "The union activity is in the early stages. We don't have the power to act yet, but speaking up is the first step," he said.
Discussions between the union and the company are at a stalemate. Samsung has held negotiations with the union more than 10 times since January, explaining that it will "continue to have dialogue in the future." The labor union claims that "they do not respect their employees. They have no blueprint to turn the company around," and is planning further strikes.
Labor union activity has long been active in South Korea, and strikes at large companies are not uncommon. However, Samsung is the only company that has not experienced a strike since its founding in 1969.
Founder Lee Byung-chol prioritized employee welfare and set a management philosophy that guaranteed generous compensation. At the same time, he was also adamant about "union-free management," and once said, "I will not recognize unions as long as I am alive." The second-generation chairman, Lee Kun-hee, also adhered to the principle of no unions while striving to improve working conditions.
This principle changed in 2020 when Lee Kun-hee, the former chairman, passed away. This was because Lee Jae-yong, the third president who succeeded him, announced that he would end the non-union management. The background to this is political and social changes.
In South Korea, during the 2017-2022 term of the previous administration of Moon Jae-in, a progressive leader with labor unions as his support base, progress was made in the establishment of laws to protect workers' rights. In response to the social climate, "Samsung was forced to adopt a tolerant stance (to labor unions)," said a labor union source.
Another factor is that the "MZ generation," people in their 20s and 30s in South Korea, are highly interested in labor rights. In February, the Samsung Group's first cross-company union was launched, and young employees, in particular, began calling for improvements to holidays and working conditions. They build internal networks on social networking sites and actively discuss ways to change the work environment.
Employees are also feeling anxious about the weakening of Samsung's "one-strong position," which has supported South Korea's gross domestic product (GDP). SK Hynix, the second-largest semiconductor company in Korea, has been attracting attention for its cutting-edge semiconductor technology, and its current market capitalization is 141 trillion won (about 16 trillion yen), four times what it was 10 years ago. Samsung is huge at about 460 trillion won, but SK is gradually catching up.
Professor Ahn Ju-young of Ryukoku University, who is knowledgeable about Korean labor policy, points out that Korea has a history of improving wages and working conditions through strikes in manufacturing industries such as automobiles and shipbuilding. "The wave of (strikes and other) movements is spreading to the semiconductor industry, where performance has been declining," he says.
Ahn also said about the strike, "This is the starting point for a healthy labor-management relationship at Samsung, where the voices of workers have been drowned out, and the focus is on how far Samsung will respond to the union."
Samsung has used a top-down approach to increase its centripetal force and connect it to competitiveness under a union-free management and performance-based approach. The first strike reflects Samsung's transformation into a "normal company" in Korea. Samsung is now being asked how it can regain its competitiveness while reconsidering how it communicates with its employees.