SK hynix expected to offer W1.2m incentives to employees to boost morale

SK hynix headquarters in Icheon, Gyeonggi Province (Yonhap)

SK hynix, the world's second-largest memory chip maker, is expected to offer financial incentives of 1.2 million won ($926) to each of its employees to boost morale, as the company has been struggling from consecutive losses in quarterly earnings, according to industry sources, Wednesday.

SK hynix's labor union held a staff briefing session recently to explain it has come to an agreement with the company management for the company to provide the incentive to employees, according to sources. The decision will be confirmed on Thursday when the agreement is ratified by the union.

The incentive adds to the tentative wage deal for 2023, which promises a 4.5 percent wage increase, and will be retroactively applied when the operating profit turns to surplus. Once a rebound is visible, the workers will receive a retrospective pay raise under the agreement.

The incentive will be given to all employees on Aug. 10. While the previous deal was overwhelmingly voted down by the full-time union members, the firm and the union have strived to work out this compromise.

In the meantime, the chipmaker reported an operating loss of 2.8 trillion won ($2.1 billion) in the April-June period, falling into the red for the third consecutive quarter amid a severe market downturn.

Adding to the first quarter loss amounting to 3.4 trillion won, the firm already logged a deficit of approximately 6.3 trillion won for the first half of the year.

By Mun So-jeong(munsojeong@heraldcorp.com)