Samsung Electronics and its largest labor union have reached a preliminary agreement for a 5.1% wage increase and stock awards for employees in 2025, aiming to ease tensions that led to the company’s first labor strike last year. As part of this agreement, Samsung will provide 30 shares of the company to all employees for the first time, valued at approximately $1,200 based on Monday’s closing price. Additional benefits include a discount allowing each employee to purchase 2 million won (about $1,400) worth of Samsung electronics.
In a notable move, the company will also rehire retirees with three or more children, addressing the country’s declining birth rate. The National Samsung Electronics Union, representing around 37,000 members, will vote on this preliminary agreement from February 28 to March 5. This initiative comes as Samsung seeks to resolve labor disputes while facing increased competition and market share losses to rivals.
In 2024, Samsung’s market value dropped by over a third after it struggled to compete with SK Hynix in the advanced memory market for Nvidia’s AI accelerators, alongside growing competition from Chinese smartphone and consumer electronics manufacturers. Last summer, Samsung’s stock plummeted following failed negotiations over pay and bonuses, resulting in the first-ever worker strike. Traditionally, wage increases are determined by a council with representatives from both the company and the union.
In January, Samsung addressed a key demand from the labor union by deciding to partially pay executives’ bonuses in stock for the first time. The company’s new policy to rehire retirees with three or more children reflects the financial challenges faced by these employees and aims to tackle domestic issues, as South Korea recorded one of the lowest birth rates globally at just 0.72 children per woman in 2023. The national government is investing over 380 trillion won in incentives to encourage childbirth, including subsidies for prenatal care and monthly cash payments for families with young children. Other companies are also contributing to these efforts, with Booyoung Group offering substantial cash bonuses to employees who give birth and gaming company Krafton Ltd. planning similar initiatives.
