Taiwan’s Hon Hai Precision (better known as Foxconn) plans to trim its workforce of 1.3 million as falling smartphone growth is slowing its once spectacular revenue performance.

Foxconn is the largest contract electronics manufacturer in the world and a key supplier for Apple.

Its growth slowed over the past two years from double-digit rates from 2003 to 2012, Reuters reported. Revenue grew 6.5 per cent last year, after growing just 1.3 per cent in 2013.

The company told Reuters that labour costs in China have more than doubled since 2010, while margins on devices have continued to decline. The company didn’t specify the size of the reduction or when it would make the cuts.

ABI Research has forecast smartphone growth in Asia dropping to 17 per cent last year from 43 per cent in 2013. The research firm expects growth this year to slow to 10 per cent as China’s robust expansion stalls.

As growth slows worldwide, margins are declining – IDC expects the average smartphone price to drop from $297 last year to $241 in 2018.