Foxconn cuts 50,000 contract jobs in China amid slowdown

Apple's biggest iPhone assembler, Foxconn Technology Group, has let go around 50,000 contract workers in China since October, months earlier than normal, Nikkei reported yesterday.

The scale of the cuts is not necessarily deeper than previous years, but it is simply significantly earlier, the report said, citing an industry source familiar with the situation.

"It's quite different this year to ask assembly-line workers to leave before the year-end," the source told Nikkei. The contracts would usually be renewed every month from August until mid-to late January, when workforce is scaled back.

Foxconn, formally known as Hon Hai Precision Industry, was not immediately available for a comment.

Earlier this month, Nikkei reported that Apple cut the current quarter's production plan for new iPhones by 10 per cent amid slowing demand in China, the world's largest smartphone market.

Yesterday, Nikkei reported that other key iPhone suppliers have also let workers go much earlier as Apple struggles with slower-than-expected demand for its iconic smartphone.

Pegatron, Apple's second-biggest iPhone assembler, had also begun cancelling monthly contracts in November, Nikkei reported.

Foxconn is also hoping to cut costs with an organisational restructuring, Nikkei said, citing how it recently merged business units making Apple's MacBooks and iPads with another division making laptops and desktops for Dell and Acer.

The move was part of Foxconn's push to cut 100,000 jobs out of about 1.1 million by the end of last year.

Foxconn's Zhengzhou factory has seen peak employment fall from 400,000 to 300,000 in recent years due to automation and efficiency enhancements.

REUTERS

A version of this article appeared in the print edition of The Straits Times on January 19, 2019, with the headline 'Foxconn cuts 50,000 contract jobs in China amid slowdown'. Print Edition | Subscribe