Samsung Biologics Faces W640 Billion Loss as Historic Strike Continues, Mediation Looms
Samsung Biologics, a key biotech arm of Samsung Group, is currently navigating its first-ever general strike, now in its third day. This escalating pay dispute with its labor union is severely testing the company’s labor relations and vital production stability.
The union initiated a five-day walkout on Friday, demanding a substantial 14 percent average wage increase, a one-time cash payout of 30 million won ($20,400) per employee, and a bonus equivalent to 20 percent of operating profit. These significant employee demands highlight the core of the ongoing labor dispute.
In response, Samsung Biologics has offered a 6.2 percent wage increase, stating that the union’s demands are not aligned with the company’s current financial capacity and operational constraints.
Beyond wage negotiations, the union is also pushing for a greater role in broader personnel and institutional matters, citing what it describes as “abnormal management decision-making.” The company has firmly rejected this demand, arguing that requiring prior union consent could impede its long-term growth and operational agility.
Approximately 2,800 of the union’s 4,000 members, constituting over half of the company’s roughly 5,400 employees, have joined this industrial action. Instead of public rallies, employees are primarily participating by taking annual leave or declining holiday shifts, impacting biotech production.
Samsung Biologics estimates potential losses from the five-day strike could reach 640 billion won or more. This figure represents roughly half of its impressive first-quarter sales of 1.26 trillion won, underscoring the severe economic impact of the industrial action.
A smaller, three-day partial strike involving around 60 workers last week had already disrupted production. The company estimated losses of about 150 billion won after the output of key drugs, including critical cancer and human immunodeficiency virus treatments, was temporarily halted.
“Despite concerted efforts to minimize disruption, some production stoppages were unavoidable due due to supply delays in key materials,” the company stated, acknowledging the challenges in maintaining biotech output.
This current walkout marks the very first industrial action the company has experienced since its establishment in 2011, making it a pivotal moment in Samsung Biologics’ labor history.
Prior to the strike, management and the union engaged in 13 rounds of negotiations, including two meetings with the CEO, before mediation efforts officially broke down on March 23.
“The central issue isn’t that the union’s demands were excessive,” union officials asserted. “The company failed for over a month to present a proposal acceptable to our members, and despite being fully aware of the potential losses from a strike, it fell short in both substantive negotiations and comprehensive contingency planning.”
The company, however, maintained that it worked diligently to bridge the gap but encountered persistent differences over management rights and the compensation structure. It also affirmed that contingency measures were in place to contain production disruptions.
“We are treating the production disruptions caused by this strike with the utmost seriousness,” the company emphasized. “We will implement all possible measures to prevent further damage and fully participate in upcoming mediated talks scheduled for Monday,” signaling a commitment to resolving the labor dispute.
Both parties are expected to return to the negotiating table on Monday, with the regional office of the Ministry of Employment and Labor serving as the official mediator. Should these critical talks fail, the Samsung Biologics union has indicated the possibility of staging another walkout, further extending the uncertainty.
