As part of the initial agreement, Samsung will distribute 30 shares of the company to every employee, which is worth around $1,200 based on Monday’s closing price. Other benefits include allowing each worker to buy up to 2 million won ($1,400) worth of Samsung products at a discount. Additionally, the company is making a unique move by rehiring retirees who have three or more children, responding to the national concern over declining birth rates.
The National Samsung Electronics Union, with about 37,000 members, will vote on this preliminary agreement from February 28 to March 5. This step comes as Samsung seeks to ease labor tensions while it struggles to maintain its market share against competitors in several key sectors.
In 2024, South Korea’s largest company saw its market value drop by more than a third after failing to keep pace with SK Hynix Inc. in the race to supply advanced memory for Nvidia Corp.’s AI accelerators. It’s also facing stiff competition in the smartphone and consumer electronics markets from Chinese companies.
Last summer, Samsung's stock took a hit after pay and bonus negotiations fell apart, leading to the first-ever worker strike. Traditionally, wage increases are determined by a council made up of representatives from both the company and the union. In January, Samsung took a significant step by agreeing to pay part of executives’ bonuses in stock instead of entirely in cash, addressing one of the key demands from the labor union.
Among the initial measures agreed upon, Samsung will implement a policy to rehire retirees with three or more children, acknowledging the financial pressures these employees face due to rising education costs and addressing broader domestic challenges.
South Korea is experiencing one of the lowest birthrates globally, recorded at only 0.72 children per woman in 2023. In response, the national government is investing over 380 trillion won in initiatives aimed at increasing birth rates, which include subsidies for prenatal care and monthly financial support for families with children up to the age of five.
Additionally, various companies are contributing to these efforts. Booyoung Group, a construction firm, has started providing 100 million won, approximately $70,000, to each employee who has given birth since last year. Similarly, gaming company Krafton Ltd. is planning to implement comparable cash incentives for its employees.