Samsung averts strike by 48,000 workers, shares surge 6.5%
Samsung just dodged a major strike. Nearly 48,000 workers were set to walk out for 18 days, which could have shaken up the global chip supply and South Korea's economy.
Thanks to a last-minute tentative wage agreement with its labor union, Samsung's shares shot up 6.5% on Thursday morning.
Union members will vote on the deal between May 22-27.
KOSPI rises over 5%
The news also lifted the KOSPI stock index by over 5%. While investors are relieved, analysts say higher labor costs might squeeze Samsung's profits down the line.
To help manage expenses, Samsung is offering performance bonuses as stock instead of cash this time around.
The talks had been tense, especially over how bonuses get split between their top-earning memory chip division and their struggling logic chip business, but for now, everyone gets a breather from strike worries.