Samsung’s Union Strikes Back: Wage Cuts and Executive Bonuses Spark Outrage

Recently, the union membership at Samsung Electronics has skyrocketed. The union has taken a firm stance against the company, including staging bus protests. According to these union members, Samsung Electronics Chairman Lee Jae Yong is commonly referred to as the puppet chairman among company employees, which is attracting attention.

In an interview with OhmyNews, the Chairman of the National Samsung Electronics Labor Union Son Woo Mok shared his perspective. He also discussed the current crisis facing Samsung Electronics. According to the semiconductor industry, Samsung Electronics is perceived to be in crisis as it entered the HBM sector late, allowing competitor SK Hynix to take the lead in HBM.

Samsung Electronics announced strong performance in the first quarter of this year after achieving an operating profit of about $1.5 billion, marking a return to profitability for the first time in five quarters since the fourth quarter of 2022. However, last year, Samsung’s semiconductor business recorded a loss of $11.5 billion.

Amid these circumstances, the first-ever strike in the history of Samsung Electronics took place on June 7, a stepping-stone holiday. The strike was led by the National Samsung Electronics Labor Union, which was established in 2019. The union’s membership exploded this year, making it a formidable force.

About 28,000 of Samsung Electronics’ total workforce of approximately 120,000, or 23%, have joined the union. This is about three times the number from last year (2023).

So, what are their grievances against the company? In response, Son said, “The company is not listening to the voices of the employees at all,” and “While Samsung Electronics is in crisis, only the executives are benefiting.”

Samsung has entered an emergency management system this year, resulting in six-day work weeks among executives, to which the Samsung Electronics Labor Union has objected. This is because the actual wages of semiconductor sector employees have decreased.

Samsung Electronics eliminated the performance bonus system last year due to a massive deficit, resulting in a decrease of about 30% in employees’ real wages. However, according to the Samsung Electronics Labor Union, executives have received incentives of more than $181,000 from the company.

Additionally, the Samsung Electronics Labor Union claimed, “Samsung Electronics has set aside a separate incentive for executives,” and “The amount is about $274 million.” They added, “If even one-third of these funds were used for employees, they could have distributed $850 per person. If $850 were distributed to 120,000 people, the total amount would be $87 million.”

In the interview, Son also revealed the nickname that employees use for Lee within the company. Son said, “The actual employees call the Samsung chairman the puppet chairman,” and “The real power in Samsung Electronics is Vice Chairman Chung Hyun Ho.” Jung, who majored in business administration at Harvard University, has been expanding his influence since he became head of the Samsung Electronics Business Management Group in 2002.

He has served as the president of Samsung Electronics since 2017 and became vice chairman in 2021. According to the union, the bus protest was directed to the Seocho office where Jung works, not to Lee’s Itaewon residence as the vice chairman is the real one with power.

The union also expressed disappointment in the chairman. Samsung has long maintained a no-union management policy. However, when the chairman faced the risk of arrest in 2020, he promised to abandon this policy.

In response, the union said, “It seems like he’s only trying to prevent the establishment of the union,” and “There’s no change from before.” The union also mentioned former Chairman Lee Kun Hee. The union said, “If he were like former Lee, he would have already sent a message or encouraged the employees,” adding, “On the other hand, Lee has not shown any reaction and is keeping silent.”

Meanwhile, the chairman has been on a business trip to the U.S. since May 31. According to industry sources, the chairman is expected to meet with AI and semiconductor companies in the U.S. to discuss cooperation and other matters.