Is Korea's 52-hour workweek costing Samsung billions in profits?

A new report highlights have Samsung's system LSI division is finding it difficult to meet project deadlines since employees can't work beyond the 52-hour limit. This has forced employees to go home even if that means leaving tasks unfinished.

Some employees are working “off-the-record” to meet deadlines

A senior engineer on the mobile AP team, it's the team that makes Exynos chipsets, reportedly said “There have been many times in recent years when I had to leave work unfinished and go home because of the 52-hour limit, even though a project deadline was approaching,” adding that because of this limit, some employees often work off the clock even though those hours aren't recorded by Samsung.

There's additional pressure on the team to complete projects on team as it operates with a workforce that's said to be 10 to 20 times smaller than the likes of Qualcomm, MediaTek, and Apple. Yet, tight product deliver schedules and the need to meet performance standards has made some employees resort to “off-the-record.”

Surely the fix here would be to expand the team and not have current employees work beyond a limit that's meant to provide them with a healthy work-life balance?

One of every six South Korea workers puts in more than 55 hours a week at work, more than double the average for OECD countries. The 52-hour workweek was established in 2018. It mandated that employees will not work more than 40 hours a week and eight hours a day, with 12 hours of overtime allowed per week, making 52 the maximum working hours per week.

Samsung reportedly sees the current labor law as a drag on its productivity, preventing it from fully competing against global chipmakers. Other companies have been vocal in their opposition to the 52-hour workweek and it has faced legal challenges as recently as last year, but South Korea's Supreme Court upheld the law in March this year.

Samsung might feel that being unable to extract the full competitive potential from its workforce prevents it from realizing billions in lost profits from the highly lucrative and very competitive semiconductor industry, but the report also mentions that some employees at Samsung believe that simply making people work for more hours isn't going to fix the issues that the company faces.