Foxconn workers bear brunt of falling iPhone sales

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iPhone sales drive Apple’s biggest supplier to big profits
One of Foxconn's many factories, where it builds iPhones for Apple.
Photo: CBS

Reduced iPhone demand in China has hit Foxconn employees’ salaries and benefits, according to a new report.

A number of workers say that their salaries were reduced at the end of last year, due to a smaller number of working hours available. There has also not been the usual Foxconn recruitment drive, which was previously an expected part of the iPhone manufacturing process.

One worker says that the peak production period for the 2018 iPhone lasted just 20 days. This is a much smaller window than the usual 4-5 months. “In September, our line supervisor told us that Apple added a new order for three million iPhone 8 Plus [units],” the employee is quoted as saying. “It only took us about 20 days to finish the production because we worked 18 hours a day in two shifts, including weekends. The peak season didn’t last long at all.”

A previous rumor claimed that Foxconn fired 50,000 seasonal workers late last year. However, this latest report claims that they actually resigned due to a lack of overtime opportunities.

Foxconn’s budget for 2019 is expected to be cut “almost in half” as the company slashes costs in what it expects to be a “very difficult and competitive” year.

The end of perks

In addition to the reduced wages, the report also singles out several instances in which benefits have been cut. A shuttle bus for transporting live-in workers to their dormitory areas has been cancelled. As a result, some people have to walk for around 40 minutes to get home at the end of the day.

A laundry service which was previously free has also been scrapped. Foxconn employees must now pay for their clothes to be washed.

Bad news for workers

Slowing iPhone sales caused Apple to adjust its earnings guidance earlier this year. In particular, diminishing iPhones sales in China was a major concern for Apple. Things may be back on the upswing, however, according to UBS analyst Timothy Arcuri.

Given the realities of “just-in-time” manufacturing, it’s no surprise that slowing iPhone sales would have an impact on people working in the supply chain. Provided this report is accurate, hopefully the workers affected can find other employment soon.

Source: SCMP

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