As Samsung prepared for a massive 96 percent dip in operating profit, it also made reductions to the pay raise that employees would receive this year, which is 4.1 percent, according to the latest report. Unfortunately, the figure is significantly less compared to what they got last year, and even though the company’s mobile division seems to be doing well, other businesses are not.
Employees received a 9 percent pay raise in 2022, which was the highest in a decade
A 4.1 percent pay raise for 2023 is still a decent sum, especially considering that the operating profit Samsung made was the lowest in 14 years. According to Yonhap, raises for board members were frozen due to poor performances that have adversely affected Samsung’s chip arm. The global economy has also resulted in weakened demand. Apparently, a compromise took place between the two parties, and a settlement was reached.
Just last week, for the January to March period, Samsung estimated that its operating profit would be just 600 billion won, or $454.9 million, down from 14.12 trillion won a year ago, which is a whopping $12.06 billion. This massive setback forced Samsung to cut down on memory production while also estimating a deficit of 4 trillion won, or $3.42 billion. Fortunately, the Galaxy S23 series were in high demand and helped Samsung stave off any additional losses, which will be surprising to many, given that smartphone demand has decreased as well.
Originally, Samsung reportedly planned to increase the board members’ average salary by 17 percent, but as you can see, the poor financials adversely impacted its decision. At the same time, Samsung’s unionized workers, which account for around 4 percent of the total 110,000 workforce, have engaged in wage negotiations with the company’s management since late last year.
The report states that both parties have held 10 rounds of negotiations, but an agreement could not be reached. Looking at Samsung’s estimated operating profit for Q1 2023, the company may convince the unionized workforce that the current quarter was a disaster and it might offer them other benefits, assuming the Korean giant enjoys the remaining three quarters of the financial year.
News Source: Yonhap
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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