LG Uplus's union is maintaining its demand for "a bonus equal to 30 percent of operating profit," raising the likelihood of a prolonged round of wage and collective bargaining negotiations. With KT also set to begin labor-management talks next month, observers say the "N percent bonus" negotiation pattern triggered by Samsung Electronics could spread across the telecommunications industry.
According to the telecom industry on the 22nd, the LG Uplus joint bargaining unit (the Democratic Uplus Branch and the Hanmaeum Branch) wrapped up the fourth round of main negotiations on the 21st without finding clear common ground.
The most contentious points in the union's joint demands are "a bonus equivalent to 30 percent of operating profit" and "an 8 percent increase in total wages." These figures are striking given that the previous year's tentative agreement called for an average 1.3 percent proportional wage increase and a flat 190,000 won raise. Management reportedly countered with a 3.0 percent increase during the third round of main negotiations on the 23rd of last month, opposing the union's demand.
However, after the Samsung Electronics union secured a special bonus through negotiations, calls for expanded compensation are gaining momentum across major Korean conglomerates. In addition to LG Uplus, the unions at Hyundai Motor (005380.KS) and HD Hyundai Heavy Industries are also demanding bonuses equivalent to 30 percent of net profit or operating profit, respectively.
In LG Uplus's case, the company posted the only year-on-year increase in operating profit among Korea's three major telecom carriers in the first quarter of this year, providing the union with grounds to push for a higher wage hike. LG Uplus previously reported first-quarter consolidated revenue of 3.8037 trillion won and operating profit of 272.3 billion won, up 1.5 percent and 6.6 percent year-on-year, respectively.
The union argues that since LG Uplus had previously cited declining performance as the basis for shrinking wage increases — 8.7 percent in 2022, 6.5 percent in 2023, and 5 percent in 2024 (a 3.8 percent proportional increase plus a flat 850,000 won raise) — the company should now raise wages more aggressively during a period of growth.
But the calculus has become complicated for management because the strong performance stems not only from expanded business revenue from areas such as AI data centers (AIDC) but also from windfall gains tied to a hacking incident at a competitor. The LG Uplus union told The Seoul Economic Daily that "there are no strike plans at this point," signaling it does not intend to cause actual deterioration in profitability through labor-management conflict.
The progress of LG Uplus's main negotiations could also have a chain effect on KT's wage talks. The KT Labor Union (KT Nojo), KT's first union, operated a task force for this year's collective bargaining through the 15th of this month before launching full-fledged preparations. The union is expected to release its wage and collective bargaining demands to management as early as next month. If more cases of "N percent bonus" agreements emerge, the union could raise its demands on the grounds that wage gaps between telecom carriers should not widen. SK Telecom has been conducting wage negotiations since early this year, and the agreement is reportedly entering its final stage. The specific terms of the tentative agreement have not been disclosed.
Still, some point out that simple comparisons are difficult, as the telecom industry faces a long-term downturn driven by population decline, unlike SK hynix (000660.KS) and Samsung Electronics (005930.KS), which are benefiting from the semiconductor industry's upswing. Industry observers also voice concerns that as telecom carriers seek to rapidly transform their business models around AI transformation (AX), excessive bonus payouts could shrink AI investment and dampen long-term growth.
