Samsung Reduces Average Pay Hike To 4.1% For Workers, Puts It Off For Board Members

Samsung Electronics's management and its workers have reached a mutual agreement to an average 4.1% pay raise for the year, and freezing raises for its board members due to plunge in profits amid a worsening chip glut and a global slowdown as per IANS news.

The pay hike is lower than last year's 9% wage hike, it was the highest in a decade, but lower than the workers initial demands.

As per Yonhap News Agency, according to the sources, the world's largest memory chip and smartphone maker, came to mutual agreement with representatives of its employees over wages and other labour policies, including extending shortened working hours for pregnant employees. This announcement was made internally earlier in the day on Saturday, April 16

Both parties compromised, taking into consideration the external headwinds that affecting the quarterly profit to plunge nearly 96% in the first quarter ending in March 31, 2023.

At the same time, the management decided to put off its initial plan to raise the pay ceiling for board members by 17% and decided to implement last year's pay policy.

Since late last year, Samsung's unionised workers, 4% of total 1,10,000 workers were engaged in wage negotiations with the management. 10 rounds of negotiations took place to iron out the differences between the two parties.

Last week, Samsung announced that it has cut memory production in the short term, as its quarterly profit plunged significantly (likely 96%) amid the chip downturn, in a sharp departure from its previous position that it would not artificially reduce output.

The company estimated its January-March operating profit at 600 billion won (454.9 million USD), sharply down from 14.12 trillion won a year ago. It blamed sluggish demand for tech devices, coupled with customers' inventory adjustment, for the poor performance.