Apple Supplier Factories Reducing Staff and Cutting Overtime Due to Falling Demand

With most Apple Stores around the world closed since March 14, demand for Apple's devices has been dropping off. As a result, the factories that assemble those devices are reducing staff and cutting overtime hours, according to Financial Times.

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Multiple workers at Foxconn's Zhengzhou complex, where iPhones are assembled, said that Foxconn has paused hiring and has begun cutting some of the temporary workers that it hired after ramping up production following factory closures in February.

Overtime hours have also been cut, and Foxconn has been encouraging employees to take holidays. Workers say no overtime has been worked since April 10.

Pegatron has also been cutting employees due to falling demand. Approximately a thousand temporary and third-party workers were fired, according to an employee at the factory. "The US orders are not coming, so why would we keep all the workers," he said.

Apple has begun reopening its stores, starting with a retail location in South Korea. There is no clear word yet on when stores in the United States are set to open, but Apple is aiming for May. Stores are expected to reopen on a rolling basis, with Apple taking into account local conditions and guidelines for each location.

Top Rated Comments

FlyingDutch Avatar
52 months ago
Hardly unexpected. The recession has begun.
Score: 7 Votes (Like | Disagree)
zubikov Avatar
52 months ago
20 million people (so far) suddenly found themselves unemployed in the US. Hundreds of millions worldwide. iPhones, iPads, watches and Macs instantly just became a luxury good for the rich. Apple is not immune to this pandemic.
Score: 5 Votes (Like | Disagree)
JPack Avatar
52 months ago

There is no "lack of global airfreight capacity." Post a source or stop posting this nonsense.
https://www.cnn.com/2020/04/08/politics/cargo-prices-skyrocketing-medical-supplies-us/index.html


In fact, capacity has increased since passenger aircraft can be devoted to cargo. For example,

https://simpleflying.com/delta-ups-cargo-flights-to-seoul-and-shanghai/
Overall cargo capacity has significantly decreased. Pre-pandemic, around 50% of the world's cargo flew in the bellies of passenger planes. Converting some passenger aircraft to carry cargo only make up some of the shortfall.
Score: 4 Votes (Like | Disagree)
44267547 Avatar
52 months ago

20 million people (so far) suddenly found themselves unemployed in the US. Hundreds of millions worldwide. iPhones, iPads, watches and Macs instantly just became a luxury good for the rich. Apple is not immune to this pandemic.
Bolded:

That’s a bit of a stretch with your comment. Even before the pandemic/recession, Apple Products have always been expensive and unobtainable for some who never Had intention of owning those products to begin with to begin with. The iPhone SE has the perfect timing, in regards that it’s an entry-level iPhone that’s less than half the price of the most expensive iPhone, but will appeal to audiences across the world, not just in North America alone.
Score: 3 Votes (Like | Disagree)
JPack Avatar
52 months ago

I'm confused. Apple just launched the SE, which seems to be in tight supply. And yet instead of making more phones, they're cutting labor? Maybe the SE is made elsewhere?
The SE2 is not in tight supply though.

There is a lack of global airfreight capacity, which is putting a strain on UPS, hence the slipping delivery dates for SE2.

If you look at China, the world's largest smartphone market and also where the SE2 is manufactured, you can have one delivered for launch day.
Score: 3 Votes (Like | Disagree)
chabig Avatar
52 months ago
Analysts knows nothing. According to this article (same day), Apple is boosting production:

https://asia.nikkei.com/Business/Teleco ... ough-March ('https://asia.nikkei.com/Business/Telecommunication/Apple-aims-to-increase-iPhone-output-by-4-through-March')
Score: 2 Votes (Like | Disagree)

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