Samsung faces rare employee backlash in India

11 Sep, 2024

SRIPERUMBUDUR (India): Samsung Electronics’ production at a key plant in southern India was disrupted for a second day by hundreds of employees striking for higher wages on Tuesday, as top executives sought to resolve a rare episode of labour unrest.

South Korea-based Samsung, India’s biggest consumer electronics company, counts the country as a key growth market, competing with the likes of LG Electronics to make everything from televisions and refrigerators to smartphones.

The strike-hit plant in Sriperumbudur, the smaller of Samsung’s two Indian factories, employs around 1,800 people and makes electronic products rather than smartphones.

But it still contributes 20% to 30% of Samsung’s annual $12 billion revenue in India, said two sources with direct knowledge of the matter, speaking on condition of anonymity.

Posters saying “Indefinite Strike” went up outside the factory near the city of Chennai, where hundreds of workers in company uniforms set up tents to shade themselves from the heat.

Union leader E. Muthukumar told Reuters “the strike will continue for a third day” on Wednesday.

About half of the factory’s daily production was affected when many workers stayed away on Monday, and the protesters continue to press their demands for higher wages, better hours and most importantly want Samsung to recognise the formation of a union backed by the Centre of Indian Trade Unions group.

Shares in Samsung closed 1.9% lower in Seoul, versus the benchmark KOSPI’s 0.5% fall. Samsung’s Southwest Asia CEO, JB Park, and other senior executives are visiting the factory to find a resolution, people with direct knowledge of the situation said.

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