A union representing thousands of workers at South-Korea based electronics giant has called the first-ever Samsung strike since it was founded five and a half decades ago. The National Samsung Electronics Union announced that it will hold a one-day protest by asking all its members to use their paid leave on 7 June, and it has not ruled out a full-scale strike in the future.
Reasons behind the Samsung strike
The union, which claims to have about 28,000 members accounting for more than a fifth of the company’s total workforce, is demanding a 6.5% pay rise and a bonus pegged to the company’s earnings.
Samsung Electronics says it will continue to negotiate with the union. “We can’t stand persecution against labour unions anymore. We are declaring a strike in the face of the company’s neglect of labourers,” a union representative stated during a live-streamed news conference.
Management at Samsung Electronics has been in talks with the union since the start of this year over wages, but the two sides have so far failed to strike a deal. Samsung Electronics is the world’s largest maker of memory chips, smartphones, and televisions.
Analysts have warned that a full-scale Samsung strike could affect the firm’s computer chip manufacturing and impact global supply chains of electronics. Samsung Electronics is the flagship unit of the South Korean conglomerate Samsung Group, the biggest of the country’s family-controlled businesses that dominate Asia’s fourth-largest economy.
Samsung Group was known for not allowing unions to represent its workers until 2020, when the company came under intense public scrutiny after its chairman was prosecuted for market manipulation and bribery. Samsung Electronics shares were trading about 2% lower in Seoul following the announcement.
Samsung shares experience significant drop amidst strike news
The announcement of the first-ever Samsung strike has had an immediate impact on the company’s stock performance. On the day of the announcement, Samsung Electronics’ shares fell sharply by 3.09%, as depicted in the trading chart, according to TradingView. This decline reflects market concerns over the potential disruption to Samsung’s operations and the broader implications for its financial health.
Detailed breakdown of today’s share performance
- Opening price: The shares opened at 77,600 KRW (approximately $56.65 USD).
- Lowest price: During the trading day, the shares hit a low of 75,200 KRW (approximately $54.90 USD).
- Closing price: The shares closed at their lowest point of 75,200 KRW (approximately $54.90 USD), marking a significant drop of 3.09% from the previous close.
Market reaction
The sharp decline in share price indicates that investors are highly concerned about the implications of the Samsung strike. The market fears potential disruptions in Samsung’s production capabilities, particularly in its highly profitable memory chips and smartphone segments, which could lead to revenue losses.
Featured image credit: Babak Habibi/Unsplash
