Samsung SDS Forms First Labor Union

Samsung SDS executives and employees have raised the flag of a labor union for the first time since the company’s founding in response to the reorganization of the company’s performance bonus system.

The Samsung SDS branch of the Super-enterprise Labor Union announced its official launch declaration on July 6 and began full-scale activities.

According to the union, more than 2,000 employees participated within just two hours of starting membership applications, showing an explosive response. This accounts for about 18% of the total 11,000 employees, and the union plans to secure more than 5,500 union members in a short period of time to acquire the status of a majority union.

The immediate trigger for the establishment of this union is the compensation system reorganization plan being pushed by the company. Samsung SDS is considering abolishing the Target Incentive (PI), which was previously paid in cash, and introducing a method of paying about 20% of the annual salary in treasury stock. The company cited motivation through making employees shareholders as its rationale, but the perspective of field employees is cold.

Employees point out that treasury stock compensation increases revenue uncertainty as it is exposed to stock price volatility. In particular, the core complaint is that if cash performance bonuses disappear, the average wage will fall, which could lead to disadvantages when calculating severance pay. An employee who requested anonymity criticized, “Linking the company’s performance to the stock market’s evaluation is an act of passing management risks onto employees.”

The company set out to secure procedural legitimacy by conducting a yes-or-no vote among employees for the system reorganization. The voting period, which was originally scheduled to end on June 29, has been extended until July 7. Regarding this, questions are being raised internally as to whether the company is stalling for time to induce approval as opposition public opinion is high.

The union’s position is to break down this unilateral decision-making structure. Through its launch declaration, the union pointed out the absence of an official channel to reflect employees’ voices during major system changes. It is accelerating its expansion of influence by proposing a reasonable growth partnership, communication encompassing all employees, and the transparent execution of union dues as its future operational directions.

This move by Samsung SDS is expected to have a significant impact not only on other affiliates within the Samsung Group but also on the IT service industry as a whole. This is because it is unusual for software personnel to take collective action within Samsung, which has had a strong “no-union management” stance.

The company has maintained a principled position that it has faithfully implemented briefing sessions and voting procedures so far. However, if the union secures a majority status and gains the right to collective bargaining, an overall review of the personnel system, including the treasury stock compensation plan, will likely be inevitable. Industry eyes are on whether Samsung SDS will be able to find a solution for coexistence facing the new variable of a labor union.