(Bloomberg) — Samsung Electronics Co. and its largest labor union have tentatively agreed to a 5.1% wage increase and stock awards for staff in 2025, signaling efforts by the two sides to defuse tensions that triggered the company’s first-ever labor strike last year.
Under an initial agreement, Samsung will for the first time give 30 shares of the company to all employees — equivalent to about $1,200 at Monday’s closing price. Other perks include allowing each employee to purchase 2 million won ($1,400) worth of Samsung’s electronics products at a discount, Samsung and the union said in a statement on Monday. It’s also taking the unprecedented step of rehiring retirees with three or more children, responding to a nationwide call to reverse a plunging birth rate.
The National Samsung Electronics Union, which has about 37,000 members, will vote on the preliminary agreement from Feb. 28 to March 5. The company is taking a step toward resolving labor tensions at a time it’s ceding market share to rivals in several key arenas.
South Korea’s largest company lost more than a third of its market value in 2024 after failing to close the gap on SK Hynix Inc. in the contest to sell advanced memory for Nvidia Corp.’s AI accelerators. And it’s facing heightened competition in smartphones and other consumer electronics from Chinese rivals.
Samsung stock tanked last summer after negotiations over pay and bonuses collapsed and workers walked off the job for the first time. The company historically sets wage increases through a council consisting of representatives from both sides. The company in January addressed one of the key changes that the labor union pushed for last year by deciding to pay part of executives’ bonuses in stock rather than all cash for the first time.
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Among measures agreed upon initially, Samsung will begin a policy to rehire retirees with three or more kids — reflecting the higher education costs such employees face and addressing domestic challenges.
South Korea has one of the world’s lowest birthrates, at just 0.72 children per woman in 2023. The national government is pouring over 380 trillion won into baby-boosting incentives, including subsidies for prenatal care and monthly cash payments for families with children up to five years old.
Other companies are joining the endeavors. Booyoung Group, a housing construction company, began giving 100 million won or the equivalent of some $70,000 to each employee who’s given birth since last year. Gaming company Krafton Ltd. is planing to offer similar cash payments to staff.
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