The logos of SK Hynix is seen at its headquarters in Seongnam, South Korea, April 25, 2016. REUTERS/Kim Hong-Ji/File Photo
SEOUL: SK hynix, the world’s second-largest memory chip-maker, is under fire despite announcing hefty incentives for staff following record-high profits in 2024, driven by the global artificial intelligence boom.
While the company paid out its largest-ever bonus – about 75% of annual salary – many employees are expressing dissatisfaction, saying it is not enough.
Last month, the memory chip giant announced it had achieved its best-ever yearly earnings in 2024, posting 66.1 trillion won in sales.
Revenue grew a whopping 102% on the back of robust sales of lucrative high bandwidth memory products for artificial intelligence.
Operating profit also stood at 23.4 trillion won, surpassing the previous record of 20.8 trillion won in 2018.
To celebrate the milestone, the company distributed bonuses amounting to 1,500% of what it defines as base pay – equivalent to one-twentieth of the employee’s annual salary – according to the company.
This translates to 75% of a full year’s pay.
The labour union, however, strongly denounced the company’s management on the claim that the company had discarded the prior agreement to distribute 10% of operating profit to employees.
“We strongly condemn the company for dismissing the agreement with the labour union and unilaterally paying smaller incentives on Jan 24,” the SK hynix labour union said in a statement, noting that the policy they had agreed upon would have resulted in slightly higher payouts.
On Blind, an online community platform for employees in South Korea, an increasing number of SK hynix workers were seen posting complaints.
“In a simple calculation each employee generated more than 700 million won of operating profit last year,” one SK hynix employee wrote on Blind.
“The management said it would provide 10% of the operating profit as a profit sharing bonus, but they paid less than expected. The labour union’s suggestion has been ignored.”
The writer explained that it is the first time the company’s production and office workers have united over incentives, and that ‘smart ones’ were already looking for new jobs.
Industry sources said some believe that SK hynix has been made a ‘scapegoat’ in SK group’s ongoing effort to restructure businesses and tighten its belt as it grapples with financial strain. The country’s second-largest conglomerate has been carrying out an initiative to make up for losses from investments in its battery and energy sectors.
“Recently, the group has been carrying out a strong rebalancing restructuring initiative, and is seen to be putting financial pressure on SK hynix.
“This kind of management strategy is ailing SK hynix’s technological growth,” a labour union official said.
Amid growing complaints, SK hynix chief executive offiver Kwak Noh-jung expressed regret, saying the company made the decision upon ‘deep consideration’.
“We have discussed multiple times with the labor union to settle the appropriate amount of incentives but could not reach an agreement,” Kwak said in a statement.
“The operating profit in 2024 grew only about one trillion won from the previous record in 2018 when you exclude Solidigm’s profit. — The Korea Herald/ANN
