Foxconn Technology Group, Apple's main assembly partner for iPhones, today announced (via Reuters) major plans to reduce its workforce due to "declining revenue growth and rising wages in China." The announcement comes mere hours before Apple's financial earnings announcement for the first fiscal quarter of 2015, in which the company is expected to announce record iPhone sales.

foxconn_workers_2
The company doubled its labor costs in recent years following a few public scandals involving worker suicides and poor working conditions, while revenue growth has slowed. After a decade of steady increases following the explosion of popularity for smartphones and tablet devices, mostly thanks to the manufacturing of Apple products, Foxconn hasn't faced the issue of diminishing returns until now.

"We've basically stabilized (our workforce) in the last three years," Woo said. When asked if the company plans to reduce overall headcount, he responded "yes".

Revenue growth at the conglomerate tumbled to 1.3 percent in 2013 and only partially recovered to 6.5 percent last year after a long string of double-digit increases from 2003 to 2012.

Today's news comes on the heels of reports indicating Apple likely sold more iPhones in China than the U.S. in the last quarter, and expectations the iPhone will have record sales coming off the launch of the iPhone 6 and 6 Plus.

Foxconn's job cuts have not been specifically tied to its Apple business, but Apple is a major customer and hiring patterns do generally follow the iPhone product cycle, which should begin to slow a bit follow the rush of customers upgrading to the new models in the early months of availability. Foxconn is also reported to be increasing investments in Apple-related areas, including building a $2.6 billion display plant and perhaps working on sapphire displays for Apple products.

Update 7:48 AM: Foxconn has issued a statement calling the claims of workforce reductions "completely inaccurate", but noting it will slow its hiring in the coming years as it increases automation.

Foxconn wishes to clarify that a media report that alleges that our company is reducing its workforce is completely inaccurate and totally without foundation. We continue to recruit employees to support our business and operations globally and we continue to maintain a workforce of over one million employees worldwide. As we have long said, Foxconn is investing in the automation of many of the manufacturing tasks associated with our operations, applying robotic engineering and other innovative manufacturing technologies to enable our employees to focus on high value-added elements in the manufacturing process. As we continue to increase the application of automation in our operations, the magnitude of our employee recruitment is expected to decrease in the years ahead, but we have no plans to reduce our workforce numbers now or anytime in the future. In addition, our company is confident that we will continue to achieve sustained business growth in the years to come.

Tag: Foxconn

Top Rated Comments

bbeagle Avatar
116 months ago
Job cuts could be because of increased usage of robotics and automation, or better efficiency. It might have nothing to do with factory output or iPhone sales. It might have nothing to do with Apple itself - Apple isn't the only vendor who uses FoxConn.

So, basically this is an article meant to 'imply' something about Apple (less iPhones being produced) even though it might have nothing at all to do with Apple. Maybe this article is meant to get some people to sell their stock before Apple's sales announcement, so others can get in at a lower cost to make more money after the announcement increases the stock price?
Score: 4 Votes (Like | Disagree)
Marco Geßler Avatar
116 months ago
It's good to see that FoxConn will be using layoffs to reduce their workforce instead of what has happened in the past with attrition by suicide.

They still suicide and suffer attrition but now it's due to unemployment and does not count as Foxconn problem.

----------

"... Foxconn's job cuts have not been specifically tied to its Apple business ..."
Score: 2 Votes (Like | Disagree)
Nunyabinez Avatar
116 months ago
People in the US continue to naively think that working conditions, benefits and wages can increase for a workforce without any impact. It was inevitable that as wages increased, fewer workers could be sustained. And when wages get high enough, automation becomes economically feasible.

I'm not saying that we should turn a blind eye while China operate sweatshops, but I'll bet those people who can't get a job at Foxconn now really appreciate all the Americans that pushed for better conditions and cost them a job.

Just like all the people at my University who got their hours cut back so that they wouldn't qualify for benefits under Obamacare, since as a state university, we literally don't have the money to give them benefits (not that most companies do either).
Score: 1 Votes (Like | Disagree)
Plutonius Avatar
116 months ago
I'm sure the workers that will be let go would rather have a job than higher wages / better working conditions.
Score: 1 Votes (Like | Disagree)

Popular Stories

iOS 17

iOS 17.2 Will Add These 12 New Features to Your iPhone

Friday December 1, 2023 12:19 pm PST by
iOS 17.2 has been in beta testing for over a month, and it should be released to all users in a few more weeks. The software update includes many new features and changes for iPhones, including the dozen that we have highlighted below. iOS 17.2 is expected to be released to the public in mid-December. To learn about even more features coming in the update, check out our full list. Journal ...
iOS 16 4 Web Push

Apple Confirms Governments Using Push Notifications to Surveil Users

Wednesday December 6, 2023 5:06 am PST by
Unidentified governments are surveilling smartphone users by tracking push notifications that move through Google's and Apple's servers, a US senator warned on Wednesday (via Reuters). In a letter to the Department of Justice, Senator Ron Wyden said foreign officials were demanding the data from the tech giants to track smartphones. The traffic flowing from apps that send push notifications...
airpods pro 2 pink

Apple Releases New AirPods Pro 2 Firmware

Tuesday December 5, 2023 11:28 am PST by
Apple today released new firmware update for both the Lightning and USB-C versions of the AirPods Pro 2. The new firmware is version 6B34, up from the 6B32 firmware introduced in November. Apple does not provide details on what features might be included in the refreshed firmware beyond "bug fixes and other improvements," so it is unclear what's new in the update, but prior software releases ...
Beyond iPhone 13 Better Blue

'All-Screen' iPhone Under-Display Camera Enters Development

Wednesday December 6, 2023 2:03 am PST by
Apple's Korean suppliers have begun developing smartphone under-display cameras (UDC), paving the way for the first iPhone with a true "all-screen" appearance. According to The Elec, LG Innotek has entered the preliminary development of the UDC, which sits under the display and does not result in a visible hole in the panel when the camera is not in use. A UDC differs from a typical front ...
magsafe blue 2

iOS 17.2 Brings Qi2 Support to iPhone 13 and iPhone 14 Models

Tuesday December 5, 2023 11:04 am PST by
The iOS 17.2 update that Apple is set to release to the public in the near future will bring support for the next-generation Qi2 wireless charging standard to the iPhone 13 and iPhone 14 models. Qi2 was mentioned in the release notes for the RC version of the update that came out today. With the addition of support for the new standard, iPhone 13 and iPhone 14 models will work with Qi2...
iphone se 4 modified flag edges

iPhone SE 4 May Reuse Existing iPhone 14 Battery

Wednesday December 6, 2023 1:17 pm PST by
Recently, MacRumors has received details on the battery currently being tested on the upcoming fourth-generation iPhone SE, and the information corroborates previous findings in relation to the device. The iPhone SE 4, known by its device identifier D59, is expected to use the exact same battery found in the base model iPhone 14. Partially assembled prototypes of the next iPhone SE have been ...
airpods pro bulbs

Black Friday Prices Return for AirPods Pro 2 With USB-C, iPad, and More

Tuesday December 5, 2023 7:30 am PST by
Today we're tracking a collection of deals that are matching - or nearly matching - the same all-time low discounts we saw during Black Friday. This includes the AirPods Pro 2 with USB-C, 9th generation iPad, and M1 MacBook Air. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a small payment, which helps us keep the ...
instagram messenger

Instagram and Facebook Messenger Chats to Disconnect This Month

Tuesday December 5, 2023 1:57 am PST by
Meta has revealed plans to end Instagram users' ability to chat with Facebook accounts later this month, rolling back a feature that it introduced over three years ago. In September 2020, Meta (then Facebook) announced it was merging its Facebook Messenger service with Instagram direct messaging, allowing Instagram users to chat with Facebook users and vice versa using the same platform....