A cleanroom in a Samsung Electronics semiconductor production facility in Suwon, Gyeonggi Province. (image: Samsung Electronics)
SEOUL, May 26 (Korea Bizwire) — Major electronics companies in South Korea are grappling with weak financial performance and rising labor costs, while automakers have experienced a relative decline in labor costs, a market research firm said Thursday.
The Korea CXO Institute conducted an analysis of labor cost changes at major conglomerates between 2018 and 2023, focusing on the first quarter of each year.
The study revealed that four companies recorded their highest labor costs as a proportion of sales since 2018 in the first quarter of this year.
In the case of Samsung Electronics Co., its first-quarter sales reached 42.1 trillion won (US$31.7 billion), with labor costs amounting to 4.2 trillion won, resulting in a labor cost percentage of 10.1 percent.
This marked a 3.6 percentage point increase compared to the first quarter of 2018.
During the same period, SK hynix Inc. experienced a staggering 10.9 percentage point rise in its labor cost percentage, which reached 19.1 percent.
Although this year’s first-quarter sales were cut in half, the company witnessed a labor cost surge of over 130 billion won in 2018.
Additionally, LG Display Co. saw a jump in labor cost percentage from 13.5 percent to 16 percent, while Samsung Electro-Mechanics Co. experienced an increase from 18 percent to 23.2 percent, the highest level since 2018.
In contrast, the labor cost percentages for three major automakers — Hyundai Motor Co., Kia Corp., and Hyundai Mobis Co. — in the first quarter of this year hit their lowest points since 2018.
Hyundai Motor Co. recorded a labor cost percentage of 10 percent, marking a 4.8 percentage point decrease compared to the first quarter of 2018.
During the same period, Kia’s labor cost percentage dropped from 13.8 percent to 9.1 percent, and Hyundai Mobis Co.’s rate decreased from 5.6 percent to 4.2 percent.
“Only a few years ago, major automakers struggled with high labor costs. Now, this phenomenon has shifted to the electronics sector due to worsening market conditions,” said Oh Il-sun, the director of the Korea CXO Institute.
H. M. Kang (hmkang@koreabizwire.com)
