Hon Hai Precision Technologies, the world’s largest contract electronics manufacturer and a major supplier for Apple, plans to make “aggressive” job cuts, totalling as many as 100,000, to trim costs as it prepares for a drop in iPhone orders, Nikkei Asian Review reported.
A source said the Taiwan-based company, better known as Foxconn, brought forward an annual headcount review due to anticipated pressure to cut prices and weaker demand from Apple. The US-based company typically pushes suppliers to cut prices 10 per cent a year, but with orders forecast to fall, achieving such targets will be more difficult, the report continued.
Foxconn said in a statement its latest plan and budget is “meant to satisfy clients’ current and future demand… and meet challenges in the next one to two years”, DigiTimes said.
The job cuts will enable the company to reduce costs by CNY20 billion ($2.88 billion) next year, Bloomberg reported. It has more than 1 million employees, most working in Shenzhen, China.
Foxconn’s consolidated revenue for the first ten months of the year rose 17.7 per cent yearp-on-year to TWD4.08 trillion ($132 billion).
The global smartphone market experienced continued weakness in Q3, as the industry suffered from issues including frail consumer demand on the back of limited device innovation. Strategy Analytics data showed the market fell 8 per cent year-on-year to 360 million units in the quarter.
Apple reported flat iPhone volumes in the third quarter, inching up to 46.89 million units compared with 46.68 million in Q3 2017.Subscribe to our daily newsletter Back