Operations at Samsung Electronics’ plant in Sriperumbudur, near Chennai, were disrupted for the second consecutive day as hundreds of workers went on strike, demanding higher wages and improved working conditions.
This rare incident of labor unrest at the South Korean company has drawn significant attention, especially ahead of India’s festive season when consumer electronics sales typically surge.
Impact on Samsung Electronics Production and Revenue:
The strike is affecting the smaller of Samsung’s two factories in India, which manufacture electronic products such as televisions and refrigerators.
Though not a smartphone production facility, the plant still contributes 20% to 30% of Samsung’s annual revenue in India, which amounts to $12 billion.
According to sources familiar with the situation, production output has been cut by half since the strike began, impacting the company’s preparation for the upcoming festive season sales in October.
Worker Demands and Union Involvement:
The workers, represented by union leader E. Muthukumar, are striking for higher wages, better working hours, and official labor union recognition. Approximately half of the factory’s 1,800 employees have joined the strike, setting up tents outside the facility with posters declaring the action as an “Indefinite Strike.”
Employees have raised concerns about unequal pay for workers with the same experience level, a key issue they want addressed.
Samsung has yet to publicly respond, though a spokesperson stated on Monday that the company was engaging with workers to resolve grievances and ensure compliance with all laws.
Political and Local Support on Samsung Electronics:
The strike has garnered attention from local political leaders, some of whom attended the protest on Tuesday. Posters outside the factory urged state labor officials to engage with union representatives and support workers’ demands rather than siding with management.
This strike follows similar labor unrest at Samsung’s headquarters in South Korea. The company’s largest union, representing 36,500 workers, held strikes in July and August, demanding higher wages and benefits. However, Samsung reported that the protests in South Korea did not disrupt production.
Challenges Ahead for Samsung in India:
The strike’s timing presents a major challenge for Samsung as it ramps up production ahead of India’s festive season, a crucial sales period for consumer electronics.
Prabhu Ram, a vice president at Cybermedia Research, emphasized that the strike could severely impact Samsung’s ability to meet production targets and take advantage of the seasonal surge in consumer spending.
The situation remains ongoing, and Samsung’s response to the workers’ demands will be closely watched in the coming days.
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