In 2022, Samsung hiked the average salaries of its employees by 9%, which was the highest in a decade. This year, however, things aren't looking as good. In fact, they are bad. According to a new report from South Korea, Samsung has announced an average salary hike of 4.1% for its employees for 2023, which is less than half compared to last year. That's not all, though. The company has also decided to offer no salary hike to board members this year.
The drop in average salary hike is a direct result of the company's poor performance in the last quarter due to the global economic recession. Samsung is expecting an operating profit of KRW 600 billion (around $454.9 million) in Q1 2023, significantly lower than the operating profit of KRW 14.12 trillion (around $10.7 billion) that the company posted in Q1 2022. Samsung will witness this lowest operating profit in the last fourteen years.
Samsung's terrible performance in Q1 2023 resulted in lower salary hikes for employees
According to the report, the Korean tech giant reached an agreement with representatives of its employees earlier today. Along with the average salary hike of 4.1%, the company has shortened working hours for pregnant employees. However, exact details on this matter are scarce at the moment. Reportedly, the company planned to hike the board members' average salaries by 17%, but since financials are currently poor, Samsung dropped the ball on that one.
Unionized workers at Samsung account for 4% of the total workforce of 1,10,000 employees and have been negotiating wages with the company since late last year. There have been ten rounds of negotiation meetings so far, but they still haven't ironed out their differences. Samsung said, “We will discuss measures to boost workers' morale when the management environment improves” and added that it would “sincerely engage” in negation with the labor union.
