Samsung chairman flags economic risks as strike looms

Shin Je-yoon has warned of significant economic and operational risks from a planned workers’ strike, urging immediate dialogue as concerns grow over supply chain disruptions, investor confidence, and national economic impact.

Samsung Electronics is facing mounting pressure ahead of a planned large-scale labour strike, with Chairman Shin Je-yoon calling for urgent negotiations to prevent potential economic repercussions. In an internal message shared with employees, Shin acknowledged the seriousness of the situation and expressed regret over the uncertainty surrounding the dispute.

The chairman cautioned that a prolonged conflict between management and labour could lead to adverse outcomes for all stakeholders. He highlighted risks such as declining competitiveness, erosion of customer confidence, and financial setbacks for investors. The warning comes as unionized workers prepare for an 18-day strike scheduled from May 21 to June 7, pressing for increased performance-based bonuses.

Strike could disrupt operations and supply chains

Industry estimates indicate that the strike could inflict losses of up to 30 trillion won ($20.3 billion) on the company if it proceeds as planned. Beyond immediate financial damage, Shin stressed the broader implications for the semiconductor business, where timing and reliability are critical.

He noted that delays in production or missed delivery commitments could weaken Samsung’s market leadership, particularly as global clients may turn to competitors for stability. The potential disruption to supply chains and long-term customer relationships has raised concerns across the technology sector.

The union has reportedly demanded that 15 percent of the company’s operating profit be allocated toward bonuses. This demand follows a strong financial performance by Samsung, which recorded an operating profit of 57.23 trillion won in the first quarter, a significant increase from 6.68 trillion won a year earlier, driven largely by robust demand for advanced memory chips used in artificial intelligence applications.

Government voices concern over labour dispute

The situation has also drawn attention from South Korea’s political leadership. President Lee Jae Myung recently cautioned against excessive labour demands, warning that such actions could trigger public backlash and negatively affect workers across industries. Although he did not directly name Samsung, his remarks underscored broader concerns about balancing labour rights with economic stability.

Industry Minister Kim Jung-kwan echoed similar sentiments, emphasizing that Samsung’s success reflects collective national efforts, including contributions from its workforce.

Amid rising tensions, Shin reiterated the importance of constructive engagement, urging both sides to pursue meaningful dialogue and build a sustainable labour-management relationship to safeguard the company’s future and its role in the global technology landscape.