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Foxconn to hire 50,000 more employees despite big layoffs

By FAN FEIFEI | China Daily | Updated: 2019-01-24 07:22
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Employees work at a Foxconn factory in Shenzhen, Guangdong province. [Photo/CHINA DAILY]

Foxconn Technology Group, the biggest assembler of Apple Inc's iPhones, said it was planning to recruit more than 50,000 positions on the Chinese mainland in the first quarter, amid reports of mass layoffs.

The contract manufacturer indicated the reported changes in employee headcount were normal adjustments based on its global strategy and client needs, according to a statement released by Foxconn on Tuesday.

The company said it continues to promote the transformation and upgrading of industrial internet and intelligent manufacturing, and is committed to the cultivation and skills upgrading of its employees.

Japan's Nikkei Business Daily earlier reported Foxconn had let go of around 50,000 contract workers on the Chinese mainland since October. The scale of the cuts is not necessarily larger than that of previous years, but it is simply significantly earlier, the report said, citing an industry source familiar with the situation.

The report also said Foxconn has merged business units that make Apple's MacBooks and iPads with another division making laptops and desktops for Dell and Acer.

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

Apple has lowered its revenue forecast for the first time in almost two decades, citing weakening demand and lower-than-expected iPhone revenue in China as some of the factors. The US tech heavyweight also slashed the price of some its iPhone models by up to about 800 yuan ($118) for its channel partners in China.

Analysts estimate that Apple will cut orders to Foxconn by 20 to 30 percent, mainly due to weak demand for the iPhone XR and XS Max. Media also reported Foxconn aimed to cut 20 billion yuan from its expenses this year as it faces a very difficult and competitive year.

"Both foreign and domestic suppliers of Apple are facing huge pressure as sales of the iPhone XR are lower than expected," said Jia Mo, a research analyst with technology consultancy Canalys, adding that the suppliers should cut their dependence on Apple and cooperate with some domestic smartphone brands to mitigate risks.

Foxconn, formally known as Hon Hai Precision Industry Co Ltd, is stepping up efforts in the semiconductor and chipmaking sector, in a bid to wean itself off its heavy reliance on manufacturing smartphones and diversify into new areas.

Last year, it signed a strategic cooperation agreement with the Zhuhai city government to carry out cooperation in chip and semiconductor equipment design.

As the world's largest contract manufacturer, Foxconn acquired Japanese electronics maker Sharp Corp in 2016. Sharp is the only Foxconn subsidiary with experience of chip manufacturing. However, the Japanese company stopped developing semiconductor technology when it ran into financial problems in 2010.

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