Foxconn Cuts 50,000 Jobs Due To iPhone Sales Slowdown

by Tyler Durden
ZeroHedge.com
Fri, 01/18/2019

In the latest indication that the slump in sales of Apple’s most recent batch of iPhones isn’t a transitory trend, Nikkei Asia Review on Friday reported that Foxconn, one of Apple’s biggest and most important iPhone suppliers, is cutting seasonal staff more swiftly than in previous years, a sign that it is bracing for weak sales in the months ahead as the industry suffers its worst downturn in 10 years.

Normally, the 50,000 contract workers who have been let go at Foxconn’s most important factory in Zhengzhou would have been kept around for a few more months, as the manufacturer gradually reduced its employee head count.

The report comes after Apple announced plans to cut iPhone production for the second time in two months.

>Around 50,000 contract workers have been let go since October at Foxconn Technology Group’s most important iPhone factory at Zhengzhou, in China’s Henan Province, according to an industry source familiar with the situation. Normally, the contracts of these workers would be renewed every month from August until mid- to late January, when the workforce is traditionally scaled back for the slow iPhone production season.

The depth of the cuts isn’t deeper than in previous years, it’s just happening much earlier than expected, as many workers were asked to leave before year-end as expectations for holiday sales slumped.

The scale of the cuts is not necessarily deeper than previous years, it is simply significantly earlier, industry sources said. “It’s quite different this year to ask assembly line workers to leave before the year-end,” a source with knowledge of Foxconn’s reductions said.

Other important iPhone suppliers have let workers go much earlier than usual as they struggle with slower-than-expected demand for Apple’s iconic product. The California tech giant earlier this month shocked the market by warning of a slump in revenues at the end of 2018. This year is also shaping up to be difficult, with further declines expected in the smartphone market, while the ongoing U.S.-China trade war is taking a heavy toll.

The Rest…HERE

This entry was posted on Friday, January 18th, 2019 at 12:03 pm and is filed under China, Economics, Technology. You can follow any responses to this entry through the RSS 2.0 feed.