Samsung Electronics Co. and its largest labor union have reached a tentative agreement for a 5.1% wage increase and stock awards for employees in 2025, marking a significant step towards easing tensions that led to the company’s first-ever labor strike last year.
As part of this initial agreement, Samsung will offer all employees 30 shares of the company, valued at approximately $1,200 based on Monday’s closing price. Additional benefits include a discount program allowing each employee to purchase up to 2 million won (around $1,400) worth of Samsung electronics products. Furthermore, the company has announced an unprecedented initiative to rehire retirees who have three or more children, responding to a national call to address South Korea’s declining birth rate.
The National Samsung Electronics Union, which represents around 37,000 members, is set to vote on the preliminary agreement from February 28 to March 5. This move comes as Samsung seeks to resolve labor disputes while facing increased competition and market share losses in several key sectors. In 2024, South Korea’s largest company saw its market value drop by more than a third, largely due to its inability to catch up with SK Hynix Inc. in the race to sell advanced memory products for Nvidia Corp.’s AI accelerators. Additionally, the company is encountering intensified competition in smartphones and consumer electronics from Chinese rivals. Samsung’s stock suffered a significant decline last summer when negotiations over pay and bonuses fell through, resulting in workers striking for the first time. Traditionally, the company determines wage increases through a council made up of representatives from both the management and labor sides. In January, Samsung took a notable step by agreeing to implement one of the key changes advocated by the labor union—part of executive bonuses will now be paid in stock rather than entirely in cash.
