Apple Inc's manufacturing partner Foxconn Technology Group has frozen
hiring at a Shenzhen plant that makes gadgets including the iPhone 5 and
put the brakes on recruiting for other factories across China, but said
the move was not linked to any single client.
Foxconn runs a network
of factories across the world's No. 2 economy that make products for
tech companies from Hewlett Packard to Dell. It sought to pour cold
water on a Financial Times report that it had imposed a hiring freeze
while it slows production of Apple's latest smartphone.
"Due to an
unprecedented rate of return of employees following the Chinese New
Year holiday compared to years past, our company has decided to
temporarily slow down our recruitment process," the company said in a
"This action is not related to any single customer and any speculation to the contrary is false and inaccurate."
other Chinese contract manufacturers, Foxconn, the trading name of
Taiwan's Hon Hai Precision Industry Co Ltd, relies on a large number of
migrant labourers from across the country who journey home for the most
important holiday of the year. Many do not make it back to work, but
Foxconn spokesman Louis Woo said this year they saw as many as 97
percent of employees return.
A Foxconn recruitment centre in an
industrial suburb of Shenzhen, where job-seekers register their names
and mobile numbers, was closed on Thursday.
"I've waited here four
days now and I've spent a lot," said Yang Jun, a hopeful migrant from
Shanxi province, in northern China. "I'm not sure how long I can hold
out. If they don't contact me soon I'll have to leave."
a less-than-expected 47.8 million iPhones in the 2012 holiday quarter,
fanning fears that its dominance of consumer electronics is on the
decline as Samsung Electronics Co and other
manufacturers that use Google Inc's Android software gradually gain market share.
iPhone is Apple's most important product, accounting for half its
revenue. The company's shares slipped almost 2 pct on Wednesday to $451,
and are down about 34 percent from their September peak above $700, as
investors fret about sliding margins and intensifying competition.
Implications for Apple
watchers often take cues from its component suppliers and manufacturing
partners. In January, CEO Tim Cook took the unusual step of warning
investors that it is difficult to extrapolate from limited "data
RBC estimates that just 70 to 80 percent of Chinese workers return to factories it tracks.
year we believe the return rates have been closer to 90 percent, which
may minimize the need to hire," RBC analyst Amit Daryanani wrote in a
Wednesday research note.
"Given the timing of the freeze, it may
have more to do with higher return rates of employees versus what was
expected by Foxconn and other supply chain companies."
latest statement contradicts another Foxconn spokesman, Liu Kun, who is
cited in the newspaper on Wednesday as saying, "Currently, none of the
plants in mainland China have hiring plans."
A check on Foxconn's
recruitment website on Wednesday showed the company's Taiyuan and
Hangzhou plants were hiring. But its factory complex in the southern
city of Shenzhen is its single largest production base.
Shenzhen plant "is not hiring at the moment because workers' return rate
after Chinese New Year is very high this year, reaching 97 pct", Woo
"We replenish each year depending on the return rate."
© Thomson Reuters 2013