It’s looking like more money equals more problems for Samsung (SSNLF) .
The South Korean electronics maker posted record revenue of $233 billion in 2021, an 18% increase over the previous year. The company saw its net profit increase more than 50%.
And now the employees that helped make 2021 such a successful year for Samsung want a bigger piece of the pie.
Samsung’s South Korea-based employees, who represent about half of the company’s 270,000-person global headcount, are seeking higher wages, the Wall Street Journal reported citing internal communications, current and former employees.
The workers are seeking a nearly 16% raise, which would be the largest base-salary bump in the company’s history.
Employees in South Korea are pointing to rising living costs, improved labor productivity, and the company’s strong quarterly results in asking for an increase of 15.7% in their base salary.
The employee negotiations come at a crucial time for the company as it works hard to battle Apple (AAPL) – Get Apple Inc. Report for smartphone market share.
Samsung Bonuses Aren’t Enough
Samsung seemingly has recognized the work its employees have put into the company, rewarding them with a special bonus payment in the previous quarter.
However, during Samsung’s latest earnings call the company said that its quarterly profit was down sequentially due in part to that bonus payment.
According to a report from Nikkei, Samsung handed out 11 months’ worth of salary as a bonus to employees to combat a shortage of qualified engineers.
That bonus included a two-month bonus paid out in December 2021 and an additional three-month “service bonus” in January 2022.
The Korea Exchange reported that the average annual salary of Samsung’s nearly 110,000-strong South Korean workforce is about $106,000 as of December 2020, a 26% jump from five year earlier.
But the payment may have been necessary as Samsung has been losing talent to some rivals in Asia and Europe.
Samsung’s worldwide headcount fell by about 20,000 in 2020 compared to 2019, with the drop being led by its business sites in Asia.
Big Tech Faces Big Wage Problem
Samsung isn’t the only player in big tech that has a wage issue on its hands.
Rival Apple is having a similar problem with employees lower on the pay scale. Workers at at least eight physical Apple Stores will reportedly file to form a union.
As of February 2022, annual pay for Apple corporate jobs average about $64,000, according to Zip Recruiter. Top corporate earners make about $106,000 across the U.S.
Samsung meanwhile is benefitting from a strong year for semiconductors and strong smartphone demand. The company though has long operated without a workers union.
Last year, workers angled for a base-pay increase of 6.36% before settling on a 4.5% increase with the company.
The Journal reported that Samsung also has to deal with a batch of new upstart challengers in South Korea for talent. Samsung is competing with the likes of e-commerce company Coupang Inc and mobile giant Kakao Corp.
South Korea’s internet and tech companies offered big wage increases to attract talent amid an increase in business during the pandemic, putting pressure on other firms to match, according to the Journal.
“Samsung Electronics employees are saying, I work for a top-tier, global company. But why should I be getting paid less than these smaller firms?” Nam Sung-woon, a former Samsung human-resources manager told the Journal.
