Foxconn Technology Group, the global contract electronics manufacturer and a major supplier to Apple, has announced plans to reduce its massive workforce. The decision comes in response to decreasing revenue growth and increasing labour costs in China, a company representative told Reuters.
The company did not provide specific details on the timeline or target for the workforce reduction. However, it highlighted that labor costs have more than doubled since 2010, following significant media attention due to a series of worker suicides at the company.
Foxconn’s revenue growth plummeted to 1.3 per cent in 2013, and although it partially rebounded to 6.5 per cent last year, it remains far below the double-digit growth seen from 2003 to 2012. This slowdown coincides with a maturing market for PCs, smartphones and tablets, largely driven by Apple, Foxconn’s main client. The company now faces continued pressure from declining growth and prices in these sectors.
Furthermore, to mitigate rising labour costs, Foxconn plans to increase automation. The company aims to use robotic arms for tasks currently performed by human workers.
Last year, Foxconn announced its plans to invest an extra $1.67 billion in Karnataka. The approval for this investment came from the Karnataka State High-Level Clearance Committee, chaired by Karnataka Chief Minister Siddaramaiah. The firm planned to start making iPhones in Karnataka by April 2024, creating approximately 50,000 jobs. The extra investment aimed at establishing a manufacturing facility in Devanahalli, where Foxconn had acquired 300 acres of land for this purpose.
Under its flagship unit, Hon Hai Precision, Foxconn employs about 1.3 million people during peak production periods, making it one of the largest private employers globally.
